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M c M ASTER'S  Irregular  and  Regular 
Commercial  Paper 

A  TREATISE  ON  THE  LAW  OF  NOTES,  CHECKS  AND  DRAFTS:  WITH  TEXT  OF 
THE  NEGOTIABLE  INSTRUMENTS  LAW 

ILLUSTRATED   BY  FAC  SIMILE  INSTRUMENTS 

CLEAR  —  SIMPLE  —  COMPLETE 
NEW  ANO  ENLARGED  EDITION 


COPTRISHTeD.  1920. 

BV  The  McMaster  company 


THE   MCMASTER  COMPANY 

37  WEST  39th  ST.,  NEW  YORK  CITY 


PREFACE. 


This  book  is  to  make  possible  the  acquirement  of  so  much  of  the  law 
of  commercial  paper  as  the  business  man  or  his  assistant  finds  necessary 
in  the  transactions  of  this  commercial  day.  The  books  heretofore  com- 
piled on  this  subject  have  been  designed  for  lawyers  and  law  students  in 
Jaw  offices,  and  their  contents  are  largely  devoted  to  matter  necessary 
only  to  the  prosecution  or  defence  of  lawsuits.  They  do  not  meet  the 
requirements  of  the  counting-room  for  two  reasons : 

First.  The  business  man  cannot  grasp  and  retain  the  information  so 
put  forth,  without  several  years  of  study  in  a  lawyer's  office,  and  a  :oming 
in  contact  with  forms  and  actual  cases  as  set  forth  in  this  work. 

Second.  The  old  methods  require  a  personal  instructor,  and  he  must, 
almost  necessarily,  be  a  lawyer. 


It  is  claimed  for  this  book  that  much  technical  matter  that  could 
only  be  used  in  the  prosecution  of  lawsuits  is  omitted. 

That  the  necessary  matter  is  simplified  in  language  and  is  so  illus- 
trated by  facsimiles  of  correct  forms  and  irregular  instruments,  bearing 
explanations  and  cautions,  that  the  business  man  can  carry  the  informa- 
tion in  his  eye  and  mind  until  it  becomes  knowledge. 

As  an  aid  to  the  better  understanding  of  the  subject,  considerable 
space  is  given  to  questions  on  the  text  and  illustrations,  and  the  answers 
to  these  questions  are  so  indicated  by  exact  reference  to  the  matter  rela- 
tive to  these  questions,  that  one  is  guided  to  a  full  knowledge  of  all  that 
is  to  be  said  in  relation  to  these  questions. 


CONTENTS 

Preface   _      _  .  ii 

Definitions  and  Meanings  of  Terms  3,  4 

Law  of  Commercial  Paper  5  to  56 

Usual  Forms  op  Commercial  Paper  A  to  U,  pages  57  to  98 

Negotiable  Instruments  Law  99  to  464 

Paper,  Irregular,  Non-Necotiacle  or  Void     .      .      1      .      .      .   Numbers  1  to  140,  pages  103  to  520 

Questions  566  to  586 

Index  5S7  to  594 


DEFINITIONS  AND  MEANING  OF  TERMS. 


Bill  of  Exchange.  A  written  order  from  one  person  to  another, 
directing  the  person  to  whom  it  is  addressed  to  pay  a  third  person  a 
certain  sum  of  money  therein  named.   (Bouv.  Law  Diet.) 

Check.  A  written  order  or  request,  addressed  to  a  bank  or  persons 
carrying  on  the  business  of  banking,  by  a  party  having  money  in  their 
hands,  desiring  them  to  pay,  on  presentment,  to  a  person  therein  named, 
or  bearer,  or  to  such  person,  or  order,  a  named  sum  of  money.  (Bouv. 
Law  Diet.) 

Promissory  Note.  A  written  promise  to  pay  a  certain  sum  of 
money,  at  a  future  time,  unconditionally.    (Bouv.  Law  Diet.) 

Drafts,  as  used  in  the  collection  of  debts,  are  not  usually  nego- 
tiated. The  office  of  a  draft  is  to  collect  for  the  drawer  from  the  drawee, 
'■'^siding  in  another  place,  money  to  which  the  former  may  be  entitled, 


either  on  account  of  balances  due  or  advances  upon  consignments;  and 
although  they  may  sometimes  be  used  for  raising  money  (as  is  a  bill  of 
exchange),  that  is  not  the  necessary  or  ordinary  purpose  for  which  they 
are  employed.   93  N.  Y.  280. 

"  Bill  "  means  bill  of  exchange.  Sec.  191,  post. 

"Note"  means  negotiable  promissory  note.  Sec.  191,  post. 

"  Instrument  "  means  negotiable  instrument.  Sec.  191,  post. 

"  Commercial  Paper  "  means  bill,  note,  draft,  or  cheek. 

"  Paper  "  means  commercial  paper. 

"  Person "  includes  a  partnership,  or  a  corporation,  or  several 
persons. 

"  Principal  Obligor  " — "  Person  Primarily  Liable."  The  party 
wlio  by  the  terms  of  the  instrument  is  bound,  in  law,  to  pay  the  debt. 


and  also  to  save  harmless,  release  and  discharge  all  other  parties  to  the 
instrument.  Sec.  192,  post. 

"  140  N.  Y.  260"  means  that  the  statement  preceding  such  abbrevia- 
tion is  based  on  a  decision  of  the  highest  court  of  the  State  of  New  York, 
and  reported  in  Volume  140,  page  260,  of  the  official  reports  of  such 


decisions.  Similar  abbreviations,  with  reference  to  other  States,  mear> 
similar  kinds  of  references. 

Negotiable  Instruments  Law.    A  uniform  statute  on  the  law  of  ne- 
gotiable instruments  now  adopted  in  forty-five  States  and  the  District 
of  Columbia. 


CHtCK-  Usual  Form 


COMMERCIAL  PAPER  -  NEGOTIABLE  FNSTRUMENTS. 

THE   THREE  .PR,INCIPAL  FOHMS. 

P^OMissoHY  Note     Usual  Form 


Bill  of  ExcriANGE-DRAFT- Usual Foi\m 


^  «<^,iit. 


fry 


I.  Negotiable  Instruments.  Practically  every  written  contract  or 
agreement  whicli  involves  tlie  payment  of  money  or  property,  is  nego- 
tiable in  the  sense  that  the  owner  can  sell  it  to  another  and  that  the 
purchaser  can  enforce  it  to  the  same  extent  that  the  original  owner 
could  if  he  had  not  assigned  it.    Bonds  and  mortgages,  contracts  for 


the  sale  of  real  estate  or  persona!  property,  building  contracts,  leases, 
etc.,  would  be  negotiable  in  the  above  sense,  but  they  are  not  "  negotiable 
instruments." 

2.  Distinction.  The  material  difference  between  a  non-negotiable 
instrument  and  a  negotiable  instrument  is  that  the  party  to  the  non- 


negotiable  instrument  who  has  agreed  to  pay  money  or  property  under 
it,  may,  when  the  money  or  consideration  is  demanded  by  a  purchaser, 
set  off  against  it  any  claims  that  he  has  against  the  original  owner,  which 
he  could  have  set  off  if  it  had  not  been  assigned, — while  the  bona-fide 
purchaser,  before  maturity,  of  a  negotiable  instrument  can  enforce  it  for 
its  full  amount  against  the  maker,  regardless  of  any  counter-claim  or 
defenses  that  the  maker  has  against  the  original  owner. 

As  illustrative  of  this :  If  Alfred  Adams  and  Barney  Bell  had  made 
a  written  contract  under  which  Adams  had  agreed  to  pay  Bell  one  thou- 
sand dollars  on  the  completion  of  a  certain  building  which  Bell  had 
agreed  to  build  for  Adams,  and  if  before  the  completion  of  the  building 
Bell  had  assigned  the  contract  or  the  money  to  be  paid  on  it  to  Charles 
Clark,  and  had  directed  Adams  to  pay  the  money  to  Clark,  and  Clark 
demanded  the  one  thousand  dollars  when  it  was  due,  Adams  could  say, 
if  such  was  the  fact,  that  he  had  had  other  dealings  with  Bell  and  that 
in  such  other  dealings  there  was  a  balance  of  five  hundred  dollars  due 


Adams  from  Bell,  and  therefore  he  would  pay  Clark  but  $500, — the 
balance  that  would  have  been  due  Bell  if  he  had  not  assigned  the  money 
due  on  the  building  contract ; — and  this  settlement  the  law  would  enforce, 
as  the  building  contract  is  a  non-negotiable  instrument.  But  if  Adams 
had  given  Bell  his  promissory  note  for  one  thousand  dollars  due  at  a 
future  time,  and  if  before  that  time  Bell  had  indorsed  the  note  for  a 
valuable  consideration  to  Clark,  then  Clark  could  compel  Adams  to  pay 
him  the  full  one  thousand  dollars  regardless  of  any  sums  that  Bell  might 
owe  Adams  on  account  of  other  transactions. 

3.  Origin — Necessity  of — Negotiable  Instruments.  Originally  all  in- 
struments, including  checks,  notes  and  bills  of  exchange  were  non-nego- 
tiable,— in  the  sense  that  the  maker  could,  when  asked  for  payment, 
deduct  from  the  amount  due  on  the  instrument  any  just  claim  that  he 
had  against  the  original  owner.  Such  just  claim  would  then  be  termed 
a  counter-claim,  or  set-off.  In  the  revival  of  commerce  in  Italy,  in  the 
eleventh  century,  merchants  and  traders,  feeling  the  necessity  of  a 


moneyed  instrument,  that  could  be  used  in  liarter  and  trade,  to  a  limited 
extent  in  the  same  way  that  bank  bills  are  now  used, — and  appreciating 
that  no  such  instrument  could  be  circulated  or  sold  readily,  no  matter 
how  financially  strong  the  maker  was,  if  he,  the  maker,  could  always  in- 
sist on  adjusting  accounts  with  the  original  owner, — adopted  a  custom, 
known  as  the  "  custom  of  merchants,"  which  soon  after  became,  or  had 
the  force  of,  a  law  known  as  the  "  law  merchant,"  under  which  notes, 
checks,  drafts,  and  bills  of  exchange,  drawn  in  certain  prescribed  forms, 
and  in  the  hands  of  a  bona-fide  purchaser,  could  be  enforced  to  their  full 
extent  against  the  maker,  regardless  of  any  defenses  or  counter-claims 
that  the  maker  might  have  against  the  original  holder;  such  instruments 
are  "  negotiable  instruments." 

4.  Negotiable  instruments  are  thus  given  many  of  the  peculiarities 
of  money — i.e.,  gold  and  silver  coin  and  bank  bills.  Neither  coined 
money  nor  bank  bills  are  termed  negotiable  instruments  or  commercial 
paper,  but  they  are  in  the  highest  sense  negotiable. 


S-  A  thief  who  has  stolen  coined  money  or  bank  bills  can  pass  such 
money  to  an  innocent  party,  and  the  latter  has  a  perfect  title  to  it  and 
cannot  be  deprived  of  it  even  if  the  party  from  whom  it  was  stolen  could 
positively  identify  the  money  and  prove  the  theft ;  such  is  the  case  if  the 
stolen  property  is  a  valid  negotiable  instrument.  It  may  be  said  here 
that  as  to  all  other  personal  property — gold,  silver  (except  coined 
money),  jewelry,  grain,  horses,  cattle,  merchandise,  etc.,  etc. — the  true 
owner  from  whom  it  may  have  been  stolen  can  retake  such  property 
wherever  found  without  compensating  the  holder  in  any  way.  although 
the  holder  may  have  purchased  the  property  from  the  thief  or  other  per- 
son in  perfect  good  faith  and  paid  full  value  therefor. 

6.  Money  has  always  had  this  free  negotiation.  Negotiable  instru- 
ments— commercial  paper  as  they  are  often  termed — are  a  later  favor 
granted  by  the  law,  and  it  has  jealously  required  rigid  restrictions  to  be 
used  in  their  issuance. 

7.  Money  (coin  and  bank  bills)  is  issued  by  the  government,  or 


under  its  supervision,  and  hence  it  is  uniform,  and  one  who  takes  it  does 
so  freely  and  witliout  examination  except  to  know  that  is  not  counter- 
feit. Every  man  of  full  age  can  issue  commercial  paper,  and  of  the 
millions  of  pieces  that  are  put  in  circulation  and  negotiated  daily  scarcely 
any  two  are  alike,  and  close  scrutiny  and  a  knowledge  of  the  law  is  often 
required  in  order  to  ascertain  whether  they  are  in  fact  negotiable  instru- 
ments. 

The  importance  of  this  knowledge  is  appreciated  when  it  is  known, 
as  it  has  been  shown  by  government  statistics,  that  over  go  per  cent,  of 
the  daily  moneyed  transactions  of  this  country  are  carried  on  through 
the  medium  of  commercial  paper. 

8.  Bona-fide  Holder.  In  order  to  take  advantage  of  the  special 
privileges  attached  to  a  negotiable  instrument,  the  holder  must  have 
taken  it  before  it  was  due,  and  with  no  notice  of  any  irregularity  in  the 
instrument,  or  of  any  valid  defenses  that  the  maker  had  to  it, — and  the 
owner  must  have  parted  with  some  thing  of  value  in  acquiring  it.  The 


consideration  need  not  have  been  money, — it  may  have  been  propertj, 
the  granting  of  credit,  or  some  disadvantage  which  the  holder  assumed 
in  acquiring  it.  Such  a  holder  is  a  "  holder  in  due  course,"  often  spoken 
of  as  a  bona-lide  holder. 

9.  What  Constitutes  a  "  Holder  in  Due  Course."  "  A  holder  in  due 
course  "  is  a  holder  who  has  taken  the  instrument  under  the  following 
conditions : 

a.  That  it  is  complete  and  regular  upon  its  face ; 

b.  That  he  became  the  holder  of  it  before  it  was  overdue,  and  with- 
out notice  that  it  had  been  previously  dishonored,  if  such  was  the  fact ; 

c.  That  he  took  it  in  good  faith  and  for  value; 

d.  That  at  the  time  it  was  negotiated  to  him  he  had  no  notice  of  any 
infirmity  in  the  instrument  or  defect  in  the  title  of  the  person  negotiating 
it."     Negotiable  Instruments  Law.  Sec.  52,  post. 

10.  The  terms  "  bona-fide  holder  "  and  "  holder  in  due  course  "  are 
often  used  in  the  same  sense,  but,  technically,  there  is  a  difference  in  the 


terms,  as  a  person  who  takes  an  instrument  in  good  faith  is,  properly,  a 
bona-fide  holder,  even  if  the  instrument  is  bad  on  its  face ;  but  if  the  in- 
strument or  the  transaction  do  not  conform  to  the  four  requirements  set 
■  forth  in  the  above  definition,  the  holder  is  not  "  a  holder  in  due  course," 
and  cannot  be  protected  by  all  of  the  safeguards  thrown  around  nego- 
tiable instruments.  The  terms  "  bona-fide  holder  "  and  "  holder  in  due 
course  "  are  hereafter  used  in  the  same  sense. 

II.  Commercial  Paper.  While  the  bonds  of  railroads,  manufactur- 
ing, municipal,  and  other  like  corporations,  issued  for  the  purpose  of 
securing  loans  of  money,  are  deemed  negotiable,  if  expressed  in  apt  lan- 
guage (no  N.  Y.  469),  they  are  not  called  "  commercial  paper,"  and  as 
this  work  is  confined  to  the  treatment  of  commercial  paper  only,  such 
bonds  are  not  hereafter  referred  to  or  included  in  the  terms  "  negotiable 
instruments  "  and  "  commercial  paper."  Where  either  of  these  terms 
hereafter  appears  it  is  treated  as  synonymous  with  the  other. 

II.  Every  piece  of  "  commercial  paper  "  is  necessarily  a  "  negoti- 


able instrument,"  but,  as  in  the  case  of  the  bonds  above  mentioned,  the 
term  "  negotiable,"  or  "  negotiable  instrument,"  is  sometimes  applied  to 
instruments  that  do  not  carry  with  them  each  and  every  attribute  of 
commercial  paper. 

13.  There  is  no  particular  language  or  form  to  which  these  instru- 
ments must  conform,  but  they  must  be  restricted  to  the  single  purpose 
of  directing  the  payment  of  money,  or  promising  its  payment — not  of 
performing  some  other  act.    See  Forms  A,  B,  C.  Sec.  i,  post. 

14.  It  is  absolutely  essential  that  they  be  certain  in  every  particular 
— free  from  provisos,  contingencies,  qualifications,  doubts,  or  restric- 
tions. The  time  of  payment  must  be  fi.xed  and  capable  of  compu- 
tation ;  the  amount  certain  and  payable  only  in  money.  See  Forms  A, 
B,  C. 

15.  A  departure  from  these  certainties  or  an  enlargement  of  the 
duties  to  ue  performed  by  the  maker  or  parties  to  the  instrument  will 
relegate  the  paper  to  the  level  of  simple  contracts  which  pass  only 


subject  to  all  equities  and  coiiiiu-r-clainis,  and  tlie  writing  of  one's  name 
on  the  back  of  wiiicli  imposes  no  financial  obligation. 

16.  Just  what  words  will  or  will  not  destroy  the  negotiability  of  a 
promissory  note  or  bill  of  exchange  is  a  subject  on  which  the  courts  dif- 
fer. It  is  seldom  done  by  saying  too  little,  but  usually  in  saying  too 
much, — an  attempt  to  make  the  instrument  accomplish  more  than  one 
purpose, — the  unconditional  payment  of  the  sum  of  money  for  which  it 
is  drawn. 

17.  Form.  There  are  but  three  forms  of  commercial  paper  in  every- 
day use, — Check,  Promissory  Note,  Bill  of  E.xchange,  or  Draft.  Their 
usual  form  is  shown  in  illustrations  A,  B,  C,  D. 

18.  While  there  is  no  regular,  prescribed,  form  for  these  instru- 
ments, there  are  certain  orderly  forms  which  are  usually  followed,  and 
there  are  certain  prerequisites  without  which  they  are  non-negotiable 
instruments:  Sec.  i,  post,  et  seq. 

a.  They  must  be  in  writing  (ink,  pencil,  or  type  impressions),  and 
they  must  be  signed  by  the  maker  or  drawer ; 


b.  They  usually  state  the  place  from  which  they  are  issued,  but 
that  is  not  essential ;  they  are  usually  dated,  although  that  is  not  abso- 
lutely necessary  if  their  time  of  payment  is  not  expressed  as  being  a  cer- 
tain period  of  time  "  after  date  "  ; 

c.  They  must  be  payable  on  demand,  or  at  a  fixed  time,  or  a  deter- 
minable future  time,  or  at  a  time  certain  to  occur; 

d.  The  promise  or  order  to  pay  must  be  unconditional  and  not  con- 
tingent on  some  other  duty  or  act  being  performed,  either  by  the  payee 
or  any  one  else ; 

e.  They  must  be  payable  "  to  order  "  or  "  to  bearer."  If  they  are 
payable  to  order  the  payee  must  be  named  with  such  certainty  that  he 
or  it  is  capable  of  being  identified  ; 

f.  They  must  be  payable  in  money; 

g.  It  is  usual  to  name  a  place  of  payment  in  the  instrument.  If  no 
place  of  payment  is  named,  the  instrument  is  deemed  to  be  payable,  for 
the  purpose  of  presenting  and  protesting  for  non-payment,  at  the  place 


of  business  of  the  maker  or  the  acceptor  or  drawee,  or  if  he  have  no  place 
of  business,  then  at  his  residence.  If  the  paper  has  not  been  dishonored 
(not  been  paid)  on  the  day  of  its  maturity,  it  then  becomes  payable  at  the 
hands  of  the  owner,  and  the  debtor  is  bound  to  hunt  him  up  and  tender 
payment  wherever  the  owner  may  be. 

h.  They  must  not  show  any  alterations, — erasures  or  additions  on 
their  face. 

1.  They  must  not  carry  on  their  face  any  information  that  would 
lead  a  prudent  man  to  inquire  further  as  to  their  validity. 

/.  The  time  of  payment  expressed  in  the  instrument  must  not  have 
passed, — and  if  no  specific  time  is  expressed  they  must  not  have  been 
issued  an  unreasonable  time. 

19.  Referring  to  the  foregoing  provisions: 

a.  The  body  of  the  instrument  is  "in  writing"  if  it  is  printed  or  type- 
written or  written  with  ink  or  pencil.  The  signature  of  the  individual 
executing  the  instrument,  for  himself  or  for  a  corporation  or  for  another, 


must  be  in  either  ink  or  pencil,  although  a  stamped  impression  would  in 
many  instances  be  binding ;  but  one  who  is  entitled  to  demand  or  receive 
a  signature  to  commercial  paper  can  demand  that  such  signature  be  the 
written  name  of  the  signer  notwithstanding  the  fact  that  a  stamped  signa- 
ture or  some  abbreviation  or  other  indication  might  be  binding.  If 
the  signature  is  that  of  a  corporation  it  is  not  objectionable  that  the  cor- 
porate name  be  stamped  or  printed  if  the  officer's  name  is  written :  23 
Minn.  263  :  4  Vt.  1 1 :  35  Me.  324 :  1 32  Mass.  227 :  33  111.  424.  A  signa- 
ture by  initials  only  will  be  binding  if  it  can  be  proved.  33  111.  424 :  6 
Wend.  (N.  Y.)  443.  Also  by  an  adopted  business  name.    104  Mass.  336. 

b.  It  is  not  necessary  to  the  validity  of  the  instrument  that  the  place 
of  making  be  given,— but  it  always  should  be.  78  111.  558.  Absence  of 
date  does  not  make  the  instrument  invalid.  91  Pa.  St.  17:  31  111.  306; 
32  Ind.  375. 

If  no  date  be  given,  the  date  is  deemed  to  be  that  of  the  delivery 
of  the  instrument  to  the  person  first  entitled  to  receive  it.    See  No.  1 1 . 


If  it  is  an  impossible  date,  as  September  31,  the  date  of  delivery  usu- 
ally governs,  although  it  has  been  held  that  such  date  is  that  of  Septem- 
ber 30.  It  is  immaterial  as  to  whether  an  instrument  is  dated  Sun- 
day or  not,  if  it  was  not  in  fact  made  and  delivered  that  day. 

The  fact  that  the  instrument  is  post-dated  (dated  ahead)  or  ante- 
dated, does  not  affect  its  validity  or  negotiability;  except  that  a  check 
dated  ahead  is  usually  considered  as  a  bill  of  exchange  and  not  as  a  check. 
48  Me.  198:  32  Me.  524: 69  Cal.  550: 17  Ala.  45: 156  Mass.  508: 8  Wend. 
(N.  Y.)  478:  47  Mo.  App.  215 :  30  Vt.  11. 

It  has  been  said  that  a  check  without  a  date  is  a  nullity,  but  there 
are  no  decisions  to  that  effect  and  seemingly  no  ground  for  the  statement. 
A  bank  might  possibly  be  warranted  in  refusing  payment  of  such  an 
instrument  as  defective  in  one  of  its  orderly  parts,  but  it  must  be,  and  is, 
the  obligation  and  order  of  the  drawer  payable  on  demand. 

"An  instrument  dated  on  Sunday,  but  not  delivered  until  a  future 


week  day,  is  good.  An  instrument  is  not  complete,  nor  does  it  be.:ome 
binding,  until  it  is  delivered  and  the  consideration  passed,  and  it  then, 
only,  takes  effect ; — it  has  its  inception  only  from  that  latter  time, — it  is 
not  a  complete  instrument  until  then. 

So  if  an  instrument  be  dated  on  a  week  day  but  is  not  delivered  and 
the  consideration  is  not  passed  until  Sunday  it  is  a  Sunday  contract,  and 
it  will  not  be  valid  except  in  the  hands  of  one  who  is  ignorant  of  the 
Sunday  part  of  the  transaction.    48  Me.  198. 

An  instrument  dated  or  delivered  on  a  holiday  other  than  Sunday 
is  not  thereby  prejudiced  in  any  way. 

c.  The  instrument  is  usually  payable  on  demand  or  at  sight  or 
at  so  many  months  or  days  after  date,  or  at  a  fixed  day  of  a  certain 
month. 

The  order  or  promise  to  pay  may  be  in  installments,  if  the  time  of 
payment  of  the  installments  is  clearly  expressed. 

If  no  time  of  payment  is  expressed  they  are  payable  on  demand. 


44  Conn.  300:  24  Cal.  309:  56  Ga.  605:  52  Iowa  570:  146  Mass.  20:  125 
N.  Y.  254:  no  Pa.  St.  318. 

And  the  same  rule  prevails  where  the  blank  line  for  time  is  not  filled 
up.    81  Mo.  275:  25  Mo.  App.  170:  II  Ohio  St.  61. 

Where  commercial  paper  is  payable  on  demand  the  holder  can  make 
the  demand  at  once,  and  he  must  demand  payment  within  a  reasonable 
time  or  the  indorsers  will  be  released.  Just  what  is  a  reasonable  time 
depends  on  the  facts  of  each  particular  case.  Sec.  193,  post. 

A  check  which  is  payable  on  demand  must  be  presented  not  later 
than  the  next  business  day,  if  the  holder  lives  in  the  same  place  as  that  in 
which  the  bank  is  located  on  which  it  is  drawn.    See  Form  F. 

If  the  bank  is  in  a  different  place  the  holder  must  start  it  there  for  pay- 
ment not  later  than  the  next  business  day,  or  the  indorsers  will  be  released. 
23  N.  Y.  41 :  5  Ohio  St.  13 ;  95  Mich.  436 :  40  Me.  60 :  103  Ala.  458 :  41  Conn. 
344:  80  Md.  475:  30  N.  J.  L.  284:  42  N.  Y.  558.    Sees.  84,  146,  194,  post. 

As  to  demand  instruments  other  than  checks  no  precise  number  of 


days  is  generally  fixed  by  law  for  presentment  in  order  to  charge  in- 
dorsers. 

Sixty  days  seems  to  have  been  the  outside  limit  ever  given  by  any 
court.  The  courts  of  New  York  have  said  that  the  indorser  of  such 
instruments  has  a  right  to  expect  the  same  prompt  demand  as  a  check 
would  have. 

The  holder  of  such  instrument,  who  expects  to  retain  the  liability 
of  an  indorser,  should  not  delay  demand  for  one  day  even.  If  he 
does,  he  does  so  at  his  peril.  100  N.  Y.  539;  98  N.  Y.  379;  88  N.  Y. 
339;  41  Vt.  387:  48  N.  J.  L.  513:  27  N.  H.  230;  31  Minn.  33:  13  Mass. 
131 :  44  Me.  459:  40  Cal.  111:31  Conn.  268:  29  Iowa  249:  23  Fed.  Rep. 
710. 

At  sight.  An  instrument  payable  "  at  sight  "  is  usually  treated  as  one 
payable  on  demand,  but  in  some  States  days  of  grace  are  allowed  on 
instruments  drawn  payable  "  at  sight," — this  is  never  the  case  with  paper 
payable  "  on  demand." 


Where  an  instrument  is  drawn  payable  at  a  certain  time  after  sight, 
sight  means  the  date  of  acceptance. 

An  instrument  payable  at  the  death  of  the  maker,  or  a  fixed  time 
thereafter,  is  negotiable,  as  the  event  is  sure  to  happen.  But  if  payable 
when  the  maker  or  some  other  person  should  arrive  at  a  certain  age,  or 
should  marry,  or  on  the  arrival  of  a  certain  ship,  etc.,  the  instrument  is 
non-negotiable,  as  that  event  might  not  happen, — and  the  rule  would 
not  be  changed  and  the  instrument  become  negotiable  even  if  the  un- 
certain event  did  happen.    Sec.  4,  post. 

If  a  time  of  payment  is  expressed  it  must  not  be  coupled  with  a 
contingency,  and  it  must  be  a  time  certain  to  arrive. 

The  following  expressions  as  to  time  of  payment  are  bad,  as  the 
events  may  not  happen : 

When  my  son  is  of  age.    13  111.  604. 

When  I  am  in  funds.    3  McLean  (U.  S.)  272. 

When  my  farm  is  sold.    22  Wis.  415. 


When  my  father's  estate  is  settled.    81  111.  172. 

When  my  crop  of  wheat  is  sold.    19  Wall  (U.  S.)  560. 

When  a  certain  railroad  is  built.  14  Ohio  455 :  109  N.  Y.  63 :  62 
Tex.  188.    Cf.  Sec.  5,  post. 

If  the  time  as  expressed  is  certain,  but  the  instrument  provides  that 
the  maker  may  make  indefinite  extension,  the  instrument  is  not  nego- 
tiable. 126  Pa.  St.  194:  59  Iowa  348:  45  Mich.  371:  104  Ind.  278:  39 
Fed.  Rep.  262. 

An  instrument  payable  at  death  is  negotiable,  as  the  event  is  sure 
to  happen.    131  N.  Y.  462:  46  Ala.  587:  105  Ind.  543. 

d.  The  following  conditions  coupled  with  the  order  or  promise  to 
pay  would  destroy  the  negotiability  of  the  instrument:  "  If  on  or  before 
that  date  certain  bonds  are  delivered :  "  "  If  a  certain  lease  is  surren- 
dered :  "  "  If  a  certain  mortgage  is  not  discharged." 

A  check  or  order  on  a  savings  bank  which  says  that  the  pass  book 
must  accompany  the  order  is  non-negotiable.    139  Pa.  St.  52. 


An  order  or  promise  to  pay  out  of  a  special  funu  is  non-negotiable,  I 
as  the  fund  may  be  insufficient,  and  the  rule  is  not  changed  if  the  fund 
is,  in  fact,  sufficient.    See  Forms  12,  13,  15.  Sec.  3,  post. 

An  order  to  pay  a  certain  sum  out  of  the  proceeds  of  a  certain  claim 
is  non-negotiable.    28  Ala.  408. 

Or  out  of  the  last  payment  on  a  certain  contract. 

Or  out  of  a  sale  of  certain  bonds. 

Or  out  of  money  collected  or  to  be  collected  upon  a  certain  mort- 
gage. 4  Met.  (Mass.)  235:  51  Miss.  631 :  33  Tex.  282:  61  N.  Y.  257:  11 
Neb.  580:  16  N.  J.  L.  440. 

Or  on  account  of  cotton  shipped  this  day.    25  N.  Y.  241. 

And  the  same  rule  applies  to  an  order  to  pay  a  certain  sum,  "  and 
charge  to  account  of  paving  "  a  certain  street.  Or  to  pay  "  and  charge 
to  account  of  labor  and  materials  furnished  "  for  certain  building.  81 
N.  Y.  454:  75  N.  Y.  370:  43  N.  H.  128. 


e.  If  the  instrument  is  payable  "  to  bearer,"  or  to  a  person  "  or  uearer." 
it  is  not  essential  that  the  name  preceding  the  words  "  or  bearer  "  be  that 
of  one  capable  of  identification.  But  if  the  instrument  be  drawn  "  to  the 
order  of,"  or  to  one  "  or  order."  it  is  essential  that  the  person  or  persons 
or  body  named,  be  capable  of  identification.    Sees.  8.  9.  post. 

An  instrument  payable  to  A.  B..  without  the  words  "  to  order  of " 
or  "  order  of,"  "  or  bearer."  or  their  equivalent,  is  not  a  negotiable  in- 
strument, except  in  States  where  the  contrary  is  provided  by  statute.. 
See  Form  T. 

An  instrument,  knowingly  made  by  the  maker,  payable  to  the  order 
of  a  fictitious  payee,  is,  in  eifect,  payable  to  bearer,  and  is  negotiable.  H 
the  bona-r.de  holder  of  such  note  desires,  he  may  write  the  name  of  the 
fictitious  person  as  indorser  on  the  note.  The  fictitious  payee  may  he 
the  same  name  as  that  of  an  existent  person, — but  this  does  not  change 
the  rule. 


Paper  drawn  to  fictitious  payees  does  not  have  the  sanction  of  law 
and  cannot  be  enforced  in  the  hands  of  those  who  take  it  with  notice  of 
its  infirmity. 

But  paper  payable  to  an  impersonal  payee, — as  "  Cash,"  "  Bills  Pay- 
able," etc., — is  deemed  payable  to  bearer,  and  is  regular  and  valid,  as  is 
paper  payable  to  the  order  of  one  under  an  assumed  business  name.  70 
Miss.  655 :  26  Minn,  336 :  10  Mass.  360. 

A  note  drawn  by  a  partner  payable  to  tlie  firm,  or  vice  versa,  can- 
not be  enforced  unless  transferred  and  held  by  a  third  party;  and  this 
rule  applies  to  separate  firms  if  one  partner  in  either  firm  is  a  member  of 
the  other  firm. 

The  maker,  drawer,  payee,  drawee,  and  acceptor  of  an  instrument 
may  be  the  same  person ;  and  if  such  person  indorses  the  instrument  and 
puts  it  in  circulation  it  will  be  held  to  be  a  negotiable  instrument. 

If  the  instrument  is  payable  "  to  order  "  the  payee  must  be  a  per- 
son, persons,  firm,  corporation,  or  body  capable  of  being  identified  at  the 


time  the  instrument  is  made, — it  is  not  sufficient  that  the  payee  come 
into  being  or  is  capable  of  identification  at  the  time  the  instrument  is 
due.    26  Minn.  410:  59  Iowa  649:  16  111.  169. 

Where  the  instrument  is  payable  "  to  bearer  "  there  need  be  no 
further  or  closer  expression  of  a  payee. 

There  may  be  several  payees,  but  not  in  the  alternative.  Thus  an 
instrument  payable  "  to  the  order  of  B.  or  C."  is  defective  as  to  payee. 
106  Mass.  561 :  19  III.  81. 

But  it  is  held  that  a  bill  of  exchange  may  be  properly  drawn  on  "  A. 
or  B." 

f.  If  the  amount  stated  in  figures  and  that  stated  in  words  do  not 
agree,  the  words  will  govern.  The  instrument  must  be  payable  in 
money:  "  Dollars  "  is  the  proper  expression.  "  Gold  Coin,"  "  Specie," 
"  Legal  Tender,"  are  not  improper  terms.  But  if  payment  is  directed 
"  in  current  funds,"  "  in  New  York  Exchange,"  "  in  currency,"  the  in- 
strument is  generally  held  non-negotiable. 


The  following  mediiir.-js  of  payment  have  been  held  to  make  the  in- 
strument non-negotiable  (see  No.  86) : 

In  United  States  Bonds.    13  Minn.  90. 

In  Current  Funds.    76  No.  Car.  227:  63  Tex.  48:  18  Wis.  41. 
In  Bank  of  England  Notes.    2  Rose  225. 

"  With  Exchange."  38  Fed.  Rep.  283 :  28  S.  C.  504 :  4  N.  Dak.  30  -j 
10  Mo.  App.  527:  61  N.  W.  584:  44  N.  E.  573. 

A  promise  to  pay,  or  the  option  to  pay,  in  goods,  chattels,  bonds,  or 
other  commodities,  renders  the  instrument  non-negotiable. 

After  the  instrument  is  properly  drawn  payable  in  money,  it  will  be 
non-negotiable  if  it  provides  for  or  directs  the  performance  of  some  other 
act,  or  for  the  further  payment  of  some  indefinite  amount  or  account, — 
and  this  rule  extends  to  memoranda  made  on  the  margin  or  back  of  the 
instrunient,  if  such  memoranda  expresses  an  agreement  made  by  the 
parties  at  the  inception  of  the  instrument. 


A  distinguished  jurist  has  said  that  the  instrument  should  be  "  a 
courier  without  luggage." 

A  note  that  provides  for  the  payment  of  attorneys'  fees  in  case  of 
suit  being  brought  is  non-negotiable  in  many  States.  It  has  been  so 
held  in  103  Cal.  319:  80  Wis.  133:  92  Pa.  St.  227:  69  Md.  433:  86  Mich. 
191 :  29  Minn.  120:  84  No.  Car.  24.    See  No.  124. 

Contracts  in  the  general  form  of  promissory  notes,  but  which  are 
non-negotiable,  which  provide  for  the  payment  at  a  certain  time  of  a 
sum  of  money  "  or  the  delivery  of  1,000  bushels  of  corn,"  or  other  alter- 
native act,  are  enforceable  contracts,  and  up  to  or  on  the  date  of  the 
maturity  of  the  instrument  the  promisor  may  have  his  choice  as  to  the 
medium  in  which  he  will  discharge  his  obligation,  but  if  the  instrument 
is  not  paid  at  maturity  the  holder  can  demand  and  enforce  the  payment 
of  money.    57  N.  Y.  573  :  7  III.  461 :  32  Me.  44:  21  Tex.  466.  . 

g.  In  Alabama,  Indiana,  Kentucky,  Virginia,  and  West  Virginia 


statutes  have  been  passed  which  provide  that  negotiable  notes  must  be 
payable  at  a  bank  in  the  State,  and  in  Kentucky  such  notes  must  also  be 
indorsed  to  and  discounted  by  a  bank  in  the  State. 

The  instrument  need  not  express  a  consideration :  the  words  "  value 
received  "  and  like  expressions  are  valueless.  But  in  Missouri  the  words 
"  value  received  "  must,  by  statute,  be  stated  in  negotiable  notes.  See 
Form  B. 

Ii-i.  Alteration.  Alteration  of  material  parts  of  the  instrument  not 
only  destroys  the  negotiable  character  of  the  instrument,  but  it  usu- 
ally destroys  the  instrument  itself  and  releases  therefrom  all  par- 
ties who  did  not  make  the  alteration  or  consent  to  it.    Sec.  125,  post. 

In  order  that  the  alteration  may  be  fatal  it  is  not  necessary  that  it 
be  done  with  a  wrong  intent. — or  that  it  increases  the  amount  or  the  lia- 
bility of  the  parties, — it  is  sufficient  that  a  material  part  of  the  instrument 
be  changed,  even  if  the  change  in  itself  was  immaterial  in  fact,  or  even 


if  it  would  work  a  benefit  to  the  parties  to  the  instrument.  But  spolia- 
tion or  mutilation  by  a  stranger  to  the  instrument  does  not  release  any 
of  the  parties. 

The  material  parts  of  the  instrument  which  may  not  be  changed 

are: 

Date. 

Time  of  payment. 

Payee. 

Amount. 

Place  of  payment. 
Number  of  makers. 

The  alteration  would  be  fatal  if  the  date  or  time  of  payment  were 
changed  so  as  to  give  the  maker  and  indorser  more  or  less  time  in  which 
to  make  payment. 

And  so  if  the  payee  is  made  to  be  another  person  or  additional 
person 


Or  if  the  amount  were  made  less  or  greater,  either  of  principal  or 
interest. 

Or  if  a  place  of  payment  were  changed,  or  a  special  place  of  payment 
added  if  none  were  already  expressed. 

Or  adding  the  name  of  another  person  as  maker,  although  thereby 
the  paper  were  strengthened  and  the  liability  of  the  present  parties  les- 
sened. 

An  alteration  can  be  made  by  adding  words  as  well  as  by  changing 
those  already  written. 

This  seemingly  harsh  rule  as  to  alteration  is  applied  by  the  courts 
to  all  written  contracts, — it  is  not  limited  to  negotiable  instruments. 


I.  "  Notice  "  of  any  infirmity,  or  of  defect  in  the  title  woulu  cove 
any  information  that  a  pru.dent  person  would  gather  from  looking  at  the 
instrument,  or  information, — oral  or  written, — that  might  have  come 
through  any  other  source.    Sec.  56,  post. 

The  purchaser  is  not  bound  to  inquire  if  his  suspicions  are  not 
aroused,  but  he  cannot  shut  his  eyes  or  ears  in  the  transaction  and  then 
be  heard  to  say  that  he  had  no  "  notice  "  or  that  he  acted  in  "  good 
faith." 

"  Good  faith  "  in  such  transactions  is  good  faith  in  its  plain,  every- 
day sense,  without  quibble  or  evasion,  If  for  any  reason  the  would-be 
purchaser's  suspicions  are  aroused,  he  must  follow  the  trail  to  its  end."" 


PARTIES. 

Sec  Forms  A,  B,  C 

20.  Drawer.  The  drawer,  or  maker,  of  a  negotiable  instrument  is  the 
one  u  iio  pruniises  to  pay  or  the  one  who  directs  another  to  pay,  and 
thereby  promises  that  such  another  will  pay. 

21.  Drawee.  The  drawee  is  the  one  who  is  directed  to  pay. 

22.  Payee.  The  payee  is  the  one  to  whom  the  promise  or  direction 
to  pay  is  made. 

23.  Acceptor.  If  the  drawee  adopts  the  direction  to  pay,  and  wTites 
his  name  on  the  paper,  he  becomes  an  acceptor  as  well  as  a  drawee.  See 
Forms  C-H. 

24.  Indorser.     If  the  payee  or  any  other  person  writes  his  name  on 
the  back  of  the  instrument  he  is  an  indorser.    See  Forms  A  to  U. 


25.  The  original  parties  to  a  Check  are  (see  Form  A): 
Drawer  or  Maker. 
Drawee. 
Payee. 

26.  The  original  parties  to  a  Promissory  Note  are  (see  Form  B) : 
Drawer  or  Maker. 
Payee. 

27.  The  original  parties  to  a  Bill  of  Exchange  or  to  a  Draft  are  (see 
Form  C) ; 

Drawer  or  Maker. 
Drawee. 
Payee. 

And  if  the  Drawee  accept  the  instrument  he  becomes  the  Acceptor. 


28.  There  is  another  party  that  usually  appears  as  soon  as  the  in- 
strument is  negotiated, — the  Indorser. 

2g.  Drawer  of  Check.  The  drawer  of  check  assumes  more  responsi- 
bility than  does  the  drawer  of  other  negotiable  instruments. 

30.  By  signing  his  name  to  a  check  the  law  says  that  the  drawer  has 
said,  in  effect,  to  the  payee,  "  I  have  at  this  time  an  account  with  the 
bank  on  which  this  check  is  drawn,  and  there  is  at  least  as  much  money 
to  my  credit  in  that  account,  and  not  checked  against,  as  this  check  calls 
for." 

31.  If  such  are  not  the  facts  the  drawer  in  signing  and  issuing  the 
check  has  committed  a  fraud,  and  may  be  punished  criminally.  The 
drawer  of  a  check  further  promises  that  if  the  bank  does  not  pay  it  on  its 
due  presentation  he  will  pay. 

32.  Drawer  of  Promissory  Note.  The  drawer  of  a  promissory  note 
in  signing  and  issuing  it  says  that  when  it  is  by  its  terms  due  and  payable 
he  win  pay  to  the  lawful  holder  the  amount  of  money  that  is  due  on 


it.  He  commits  no  fraud  or  legal  wrong,  even  if  at  the  time  he  signs 
and  issues  the  note  he  has  no  means  at  hand  or  under  his  control  from 
which  to  pay  it,  nor  if  he  sees  no  way  that  he  can  meet  the  obligation 
when  it  becomes  due.  He  has  agreed  to  pay,  and  the  law,  through  its 
forms,  will  seize  his  property,  if  he  has  any,  and  have  it  sold  to  pay  the 
debt  if  he  does  not  pay  it ;  but  the  law  punishes  him  in  no  other  way  for 
not  keeping  his  promise. 

33.  Drawer  of  Bill  or  of  a  Draft.  The  drawer  of  a  bill  of  exchange  or 
of  a  draft  says,  in  legal  effect,  to  the  payee,  that  the  drawee  will  accept  the 
instrument,  as  soon  as  presented  to  him,  by  writing  his  name  across  the 
face  of  it,  and  that  the  acceptor  will  pay  the  amount  of  the  bill  or  draft 
when  by  its  terms  it  is  due  and  payable,  and  if  the  drawee  or  acceptor 
fails  so  to  pay,  that  he,  the  drawer,  will  then  pay.    See  Forms  C-H. 

34.  If  the  drawee  fails  to  accept  or  the  acceptor  to  pay,  the  drawer 
has  committed  no  legal  wrong  in  issuing  the  paper,  even  if  he  had  grave 
doubts  as  to  its  payment  when  he  so  issued  it. 


35-  Drawee  of  Check.  The  drawee  of  a  check  is  always  a  bank, 
banking  institution,  or  banker, — as  the  instrument  is  not  a  check  unless 
drawn  on  a  bank  or  banker. 

36.  If  the  account  of  the  drawer  of  the  check  has  a  credit  balance 
sufficient  to  pay  the  check  the  drawee, — the  bank,— has  promised  in  ad- 
vance to  pay  it  on  presentation, — as  a  bank  in  opening  an  account  with 
a  depositor  has,  in  law,  without  any  special  or  further  agreement,  prom- 
ised to  pay  the  depositor's  checks  as  presented  if  the  depositor  has  suf- 
ficient funds  to  his  credit  to  pay  the  full  amount  of  the  check  when 
presented.  The  bank  need  not  make  partial  payment  of  the  check  if  the 
depositor's  credit  is  not  sufficient  to  pay  the  full  amount,  but  it  may  if  it 
choose. 

37-  It  may  be  here  stated  that  the  promissory  notes  of  the  depositor 
which  are  by  him  drawn  payable  at  the  bank  where  he  keeps  his  account 
are,  on  the  day  of  their  maturity,  equivalent  to  his  checks  on  the  bank, 
and  the  bank  is  required  to  pay  them  without  further  order  from  him. 


And  the  same  rule  applies  to  bills  or  drafts  which  he  has  accepted  pay- 
able at  the  bank. 

38.  drawee  of  Bill  or  Draft.  As  before  stated,  ii  the  depositor  in  a 
bank  has  funds  there  to  his  credit  sufficient  to  meet  his  check,  the 
drawee, — the  bank, — has  made  in  advance  an  implied  legal  promise  to 
pay  it. 

39.  But  this  is  not  so  of  the  drawee  of  a  bill  of  exchange  or  of  a 
draft;  for  even  if  the  drawee  of  such  an  instrument  is  indebted  to  the 
drawer  the  law  does  not  say  that  the  drawee  (the  debtor)  has  there- 
fore promised  to  accept  the  bill  or  draft  drawn  by  the  drawer  (the  cred- 
itor). 

40.  It  is  true  that  the  law  says  that  the  drawee  (the  debtor)  must 
find  the  drawer  (the  creditor)  and  transmit  to  him  in  money  the  amount 
he  owes  him,  but  this  legal  duty  does  not  compel  the  drawee  (the  debtor) 
to  accept  the  bills  or  drafts  drawn  on  him  by  his  creditor. 

41.  It  follows  that  until  the  drawee  accepts  the  bill  or  draft  he  has 


incurred  no  liability  by  reason  of  it, — and  when  he  does  accept  it  he 
is  called  an  acceptor,  and  assumes  for  the  first  time  any  liability. 

42.  Acceptor.  When  the  drawee  accepts  the  bill  or  draft  his  posi- 
tion thereon  has  radically  changed.  From  being  a  person  who  has  no 
obligation  by  reason  of  the  bill  being  drawn  he  has  assumed  the  principal 
obligation, — he  is  "  primarily  liable,"  he  is  the  "  principal  obligor."  See 
Forms  C-H. 

43.  He  has,  by  accepting,  held  out  to  the  holder  of  the  bill,  or  the 
successors  in  ownership  to  the  holder,  that  he  is  the  principal  obligor  on 
the  bill,  and  he  promises  that  he  will  pay  it  when  it  is  due. 

44.  This  representation  and  promise  is  also,  thereby,  made  by  the 
acceptor  to  the  drawer,  payee,  and  indorsers  on  the  bill. 

45.  He  says,  in  legal  efifect,  to  each  of  them  and  all  of  them :  "  I  will 
save  you  from  paying  the  bill,  and  if  you  have  to  pay  it  I  will  reimburse 
you, — it  is  my  debt." 

46.  The  acceptance  is  properly  made  by  the  drawee  writing  the 


word  "  Accepted  "  across  the  face  of  the  bill ;  adding  the  date  of  the  ac- 
ceptance and  the  drawee's  name.    See  Forms  C-H. 

47.  If  no  special  place  of  payment  is  named  in  the  bill  the  acceptor 
may  add  to  his  written  acceptance  a  specific  place  of  payment  in  the  city, 
town,  or  village  in  which  the  bill  is  addressed  to  him,    See  No.  20. 

48.  It  is  usual  in  accepting  a  bill  or  draft  for  the  acceptor  to  write 
the  word  "  Accepted  "  across  its  face,  naming  the  date  of  acceptance  and 
adding  his  signature.  It  is  not  essential,  however,  that  the  acceptance 
be  on  the  face  of  the  paper,  and  the  acceptor  may  be  bound  even  if  he  do 
not  add  his  name  in  writing,  or  if  he  write  his  name  across  the  paper  with 
nothing  further.  18  Wall  (U.  S.)  604:  29  Me.  77;  30  N.  H.  64:  2  Hill 
(N.  Y.)  582:  37  Minn.  191:  28  Mich.  197:  118  Mass.  537:  88  Ga.  29. 

49.  While  incomplete  signatures  and  memoranda  and  stamped  sig- 
natures may  bind  an  acceptor,  maker,  or  indorser,  a  holder  entitled  to 
demand  an  acceptance  or  indorsement  may  demand  that  it  be  the  name 
of  the  person  written  in  ink. 


50.  The  holder  of  a  bill  must  not  allow  the  acceptor  to  qualify  or 
make  conditional  his  acceptance  in  any  way,  and  if  the  drawee  does  so 
accept,  the  maker  and  indorsers  will  be  released  it  the  bill  is  not  pro- 
tested.   Sec.  141,  post. 

51.  The  following  qualifications  are  bad :  Accepting  so  as  to  make 
the  bill  payable  at  a  different  time.  37  Minn.  191 :  25  Miss.  376.  Vary- 
ing the  amount.  73  Mo.  179.  Accepting  payable  in  another  city  or 
town. 

52.  Acceptor  of  Check.  While  the  obligation  of  a  bank  is  to  pay 
the  depositor's  check  if  his  account  is  good  for  it,  the  holder  of  the  check 
may  for  his  own  convenience  desire  to  have  the  bank  accept  or  certify 
it,  and  this  the  bank  may  do  if  it  choose,  although  under  no  obligation 
so  to  do,  by  an  officer  or  teller  writing  his  name  and  title  on  the  check 
and  writing  above  his  name  any  words  of  acceptance,  as  "  Good,"  "  Cer- 
tified," "  Accepted."    See  Form  G. 


53.  The  bank  has  then  made  the  debt  its  own  and  promised  abso- 
lutely to  pay  it  regardless  of  the  state  of  the  depositor's  account. 

54.  Payee.  The  payee  of  a  negotiable  instrument  is  the  one  to 
whom  the  promise  is  made.  As  payee,  he  assumes  no  financial  obliga- 
tion, but  he  frequently  does  assume  obligations  when  he  sells  and  trans- 
fers the  instrument.  Such  obligation  is  usually  that  of  indorser,  and  is 
treated  under  that  head.    See  Forms  A,  B,  C. 

55.  Indorser.  A  negotiable  instrument  differs  from  a  non-nego- 
tiable one  in  the  matter  of  the  liability  of  one  who  writes  his  name  on  the 
back  thereof.  Strictly  speaking,  there  is  no  such  thing  as  an  indorser 
of  a  non-negotiable  instrument.  Such  designation  applies  only  to  one 
who  writes  his  name  on  the  back  of  commercial  paper.  Sec.  66,  post. 

56.  Indorser's  Contract.  An  indorser  of  a  negotiable  instrument 
contracts  with  the  present  or  future  holder  of  it  that  if  the  maker  does 
not  pay  it  at  maturity,  he,  the  indorser,  will,  if  at  that  time  it  is  properly 


presented  for  payment  and  protested  for  non-payment  and  notice  thereof 
is  duly  sent  to  the  indorser.    See  Forms  A  to  Q. 

57.  Except  in  a  very  few  States,  one  incurs  no  responsibility  who 
writes  his  name  on  tlie  back  of  a  check,  note,  draft,  or  bill  of  exchange, 
that  is  non-negotiable  by  reason  of  some  of  the  non-negotiable  words  or 
clauses  hereinbefore  mentioned,  or  which  for  other  reasons  is  non-nego- 
tiable. 

58.  This  distinction  in  favor  of  a  negotiable  instrument  is  usually 
of  far  more  importance  to  the  creditor  than  the  provision  that  he  takes 
the  instrument  free  from  the  counter-claims  and  defenses  that  may  exist 
between  the  maker  and  the  original  holder. 

59.  An  indorser,  broadly  termed,  is  one  who  writes  his  name  on  the 
back  of  a  negotiable  instrument. 

60.  If  the  name  is  so  written  on  the  back  of  a  non-negotiable  instru- 
ment the  term  "  indorser  "  does  not  properly  or  legally  apply.  Cf.  50. 


61.  The  indorser  says,  in  legal  effect,  to  the  holder  thereof,  "  The 
makers  of  this  note  (if  it  be  a  note)  or  the  acceptors  of  this  biil  (if  it  be 
a  bill)  or  the  makers  of  this  check  (if  it  be  a  check)  have  promised  to 
me  and  to  you  that  they  will  pay  this  obligation,  or  cause  it  to  be  paid, 
when  it  is  due.  Now,  if  it  is  not  then  paid  I  will  pay  it  on  demand ;  but 
you  cannot  enforce  my  (the  indorser's)  implied  promise  unless  you  can 
show  that  on  the  day  of  the  maturity  of  the  instrument  it  was  presented 
by  a  proper  person  at  the  place  where  it  was  payable  and  payment  de- 
manded and  notice  given  me  of  its  non-payment,  and  protest  of  the 
instrument  duly  made." 

62.  There  may  be  any  number  of  indorsers  on  a  negotiable  instru- 
ment. 

63.  The  principal  function  of  commercial  paper  is  negotiability,  and 
if  is  negotiated  there  is  usually  one  indorser  at  least  on  it :  for,  as  com- 
mercial paper  is  usually  drawn  payable  to  the  payee  "  or  order,"  it  is 


necessary  to  the  negotiation  of  the  instrument  that  the  payee  indorse 
it, — its  negotiation  is  stopped  until  he  does  indorse  it.  The  payee  thus 
usually  becomes  the  first  indorser. 

64.  The  order  of  indorsers'  names  on  the  paper  is  very  essential  to 
the  indorsers,  for  each  indorser,  in  addition  to  promising  the  holder  that 
the  paper  will  be  paid,  says  in  legal  efifect,  to  each  person  whose  name 
appears  below  his  on  the  back  of  the  instrument,  "  I  will  save  you  harm- 
less by  reason  of  your  indorsement  of  this  paper  if  I  am  duly  notified  of 
its  non-payment." 

65.  Order  of  Liability.  Indorsers  are  liable  to  each  other  in  the 
order  in  which  their  names  appear  on  the  paper,  unless  they  have  made 
a  separate  and  specific  agreement  to  the  contrary.  That  is, — each  in- 
dorser is  liable  for  the  full  amount  of  the  instrument  to  any  of  the  several 
indorsers  whose  names  may  appear  under  his,  but  he  is  not  liable  in  any 
way  to  an  indorser  appearing  above  him  on  the  paper.  See  Forms  A 
to  Q.   Sec.  68,  post. 


66.  While  this  is  the  rule  as  between  the  indorsers,  the  holder  does 
not  have  to  recognize  it ;  he  may  proceed  against  any  of  the  parties  re- 
gardless of  the  order  of  their  liability  among  themselves.  And  he  may 
compel  any  one  of  them  to  pay  whole  debt. 

67.  Where  Written.  The  indorsement  must  be  on  the  paper  so  long 
as  there  is  room  on  the  back  or  front  to  place  it  there.  When  there  is 
no  further  room  there  it  can  be  placed  on  a  paper  properly  attached  to 
the  instrument, — attached  there  for  that  purpose. 

68.  Assignment.  An  assignment  on  a  separate  paper,  whether  in 
the  nature  of  an  indorsement  or  not,  destroys  the  negotiability  of  the 
instrument  and  leaves  it  open  to  any  equities  the  maker  may  have  against 
it. 

69.  For  the  various  forms  of  indorsement  and  their  legal  interpre- 
tation, see  Forms  A  to  U. 

70.  Discharge  of  Indorser.  An  indorser  will  be  wholly  discharged  if 
the  paper  is  not  properly  protested  on  the  day  of  its  maturity, — if  it  has 


not  ihen  been  paid:  if  the  mai<er  releases  or  surrenders  or  fails  properly 
to  protect  any  security  that  he  holds  for  it;  if  he  extends  the  time  of 
payment  without  the  indorser's  assent ;  if  the  maker  or  any  previous  in- 
dorser  pays  it  after  it  is  due.    Sec.  182,  post. 

71.  Misspelled  Name.  If  the  name  of  the  payee  or  indorsee  is  mis- 
spelled or  wrongly  designated,  it  is  proper  and  usual  for  such  person  to 
indorse  first  the  name  as  written  and  then  follow  with  his  proper  signa- 
ture. This  would  be  proper  even  if  the  misspelled  name  or  wrongly 
designated  person  was  that  of  some  other  existent  individual,  firm,  or 
corporation.  The  test  in  each  case  is,  "  Does  the  instrument  belong  to 
me,  and  was  it  intended  to  be  drawn  or  indorsed  to  me?  " 

72.  Principal  Obligor:  Party  Primarily  Liable.  These  terms,  or  either 
of  them,  apply  to  the  person  who  is  legally  and  morally  bound  to  pay 
the  paper  in  the  first  instance, — the  one  who,  in  law,  has  said  to  all  the 
other  parties,  "  I  will  save  you  all  harmless  from  any  liability  or  loss  by 
reason  of  your  being  a  party  to  this  instrument." 


73.  The  principal  obligor  to  a  promissory  note  is  the  drawer  or 
maker.    See  Form  B. 

74.  To  an  unaccepted  bill  of  exchange  or  draft  or  check,  the  drawer 
or  maker.    See  Forms  C-H. 

75.  To  an  accepted  bill  or  draft  or  check,  the  acceptor.  See  Forms 
C-H. 

76.  Orderof  Liability  Among  Themselves.  Promissory  Note.  The  order 
of  liability  among  themselves  to  a  promissory  note  is  (see  Forms  A  to 
H): 

77.  Drawer  or  maker. 

78.  First  indorser. 

79.  Second  indorser. 

80.  Third  indorser,  etc. 

81.  The  maker  has  said  to  all  of  the  indorsers,  "  I  will  pay  this 
note  in  all  events."  The  first  indorser  promised  the  same  to  all  subse- 
quent indorsers,  but  he  owes  no  obligation  to  the  maker. 


82.  The  second  indorser  promises  to  save  liarmless  all  indorsers  sub- 
sequent to  him  on  the  paper,  but  he  incurs  no  obHgation  to  those  above 
him  nor  to  the  maker,  etc. 

83.  If  a  maker  pays  the  note,  he  of  course  can  have  no  claim  on  the 
indorser. 

84.  If  an  indorser  has  to  pay  the  note,  he  can  reimburse  himself 
in  full  from  the  maker  or  any  or  all  parties  who  indorsed  above  him, 
but  he  can  have  no  contribution  from  those  who  have  indorsed  below 
him. 

85.  Where  several, — say,  for  illustration,  three, — persons  have 
signed  the  note  on  its  face  as  makers,  they,  unless  a  different  agreement 
can  be  shown,  have  agreed  among  themselves  each  to  pay  one-third  of 
the  amount,  and  if  one  has  been  forced  to  pay,  he  can  make  the  others 
contribute  their  share.    See  Form  U. 

86.  But  this  is  not  the  rule  as  to  several  indorsers.  Each  has  agreed 
to  those  under  him  to  pay  the  whole  amount. 


87.  The  holder  of  the  note  need  pay  no  attention  to  any  of  these 
agreements.  He  can  proceed  against  all  of  the  parties  or  any  of  them 
for  the  whole  amount. 

88.  These  rules  as  to  liability  apply  to  all  commercial  paper. 

89.  Unaccepted  Bill  of  Exchange  or  Draft;  Order  of  Liability  Among 
Themselves.    See  Forms  C-H. 

Drawer  (Principal  Obligor). 
First  Indorser. 
Second  Indorser. 
Third  Indorser,  etc. 

90.  Accepted  Bill  of  Exchange  or  Draft;  Order  of  Liability  Among 

Themselves.    See  Forms  C-H. 

Acceptor  (Principal  Obligor). 
Drawer. 
First  Indorser. 
Second  Indorser,  etc. 


Qi.  Check  (not  accepted  and  not  paid);  Order  of  Liability  Among 
Themselves.    See  Form  A. 
Drawer. 

Indorsers  in  their  order. 

(Except  in  Illinois,  Nebraska,  Kentucky,  Iowa,  and  South  Caro- 
Hna  the  holder  of  a  check  cannot  enforce  it  against  the  bank  if  for  any 
reason  or  whim  the  bank  does  not  choose  to  pay  it.  In  such  cases 
the  holder  must  look  to  the  drawer,  who  is  the  only  one  who  can 
bring  an  action  against  the  bank.)  124  U.  S.  385:  57  Mich.  255:  100 
Ind.  515:  83  Mo.  337:  134  N.  Y.  368:  68  111.  398:  26  Iowa  315:  31  Neb. 
'07. 

92.  Accepted  Certified  Check;  Order  of  Liability.  If  the  holder  of  the 
■check  procures  it  to  be  certified  the  drawer  and  all  of  the  indorsers  are 
released, — the  bank  is  then  the  principal  and  only  obligor.  94  U.  S.  345 : 
117  111.  106:  52  N.  Y.  350:  156  Mass.  458.    See  Form  G. 


93.  The  reason  for  this  is.  the  holder  in  presenting  the  check  was 
entitled  to  demand  the  money  for  it,  .ind.  in  legal  effect,  had  promised 
the  drawers  and  indorsers  that  he  would  present  it  promptly  and  demand 
the  cash.  Now,  if  instead  of  demanding  cash  when  he  was  entitled  to  do 
so,  he  took  the  bank's  acceptance,  he  has  released  all  other  parties  to  tlie 
check. 

94.  But  if  the  maker  before  putting  the  check  in  circulation  has  it 
certified,  then  the  order  of  liability  is: 

Bank. 
Drawer. 

Indorsers  in  their  order.    160  Mass.  401. 

95.  Surety.  .Ml  of  the  parties  to  commercial  paper  are  in  a  sense 
sureties  for  the  principal  obligor,  but  they  are  not  usually  sureties  in  the 
technical  application  of  the  term. 

,  96.  The  strict  surety  is,  in  every-day  business,  a  practically  obsolete 


party  to  commercial  paper.  His  name,  when  it  does  appear,  usually  ap- 
pears on  the  face  of  the  paper  below  that  of  the  maker,  and  to  his  name 
he  usually  adds  the  word  "  surety." 

97.  The  obligation  of  the  surety  is  stricter  than  that  of  the  indorser. 
The  indorser  says,  in  legal  effect,  "  My  contract  is  separate  and  distinct 
from  that  of  the  maker  or  principal  obligor;  I  had  nothing  to  do  with 
the  original  making  of  this  paper.  My  contract  was  made  subsequently, 
and  it  provides,  with  other  provisions,  that  you  must  protest  this  instru- 
ment at  its  maturity  or  I  am  released."  The  indorser  is  in  no  sense  a 
partner  with  the  maker  in  his  liability. 

98.  The  strict  surety  always  becomes  a  party  to  the  paper  at  the 
inception  of  the  debt, — before  the  first  delivery  of  the  paper.  He  says, 
in  legal  effect,  to  the  holder,  "  While  this  debt  is  not  my  original  obliga- 
tion, I  agree  that  you  shall  bind  me  in  all  respects  as  firmly  as  you  do 
[he  maker. '  I  have  added  the  word  '  surety  '  to  my  name,  so  that  if  any 
question  arises  in  the  future  between  the  principal  obligor  and  myself. 


or  our  estates,  it  will  clearly  appear  that  as  between  ourselves  he  is  tq 
pay  all  of  this  debt."  ' 

99.  The  obligations  of  the  surety  and  of  the  indorser  differ  in  that  the 
indorserwarrants  to  his  indorsee,  the  holder,  that  the  instrument  is  regu- 
lar and  legal  in  every  respect,  and  that  notwithstanding  the  fact  that  the 
maker  has  a  perfect  defense  to  it  and  that  it  cannot  be  enforced  against 
him,  he,  the  indorser,  will  pay  it.  On  tbe  other  hand,  the  surety 
assumes  no  more  liability  than  does  the  principal,  and  if  the  principal 
has  a  defense  to  the  instrument  the  surety  can  have  the  same  defense . 
but,  as  before  stated,  the  indorser  warrants  to  the  future  holder  that  the 
maker  or  principal  obligor  has  no  defense  to  it.  66  Conn.  65  :  54  la.  79: 
48  Pa.  St.  345:  32  Ind.  309:  3  Denio  70:  18  Pick.  98. 

100.  Guarantor.  A  guarantor,  as  well  as  a  surety,  is  an  intruder  on 
commercial  paper :  he  has  no  fixed  status  as  to  liability.    See  Form  O. 

101.  His  contracts  must  be  written  in  terms  above  his  name,  and 
what  is  there  written  will  determine  his  liability. 


103.  The  word  "  guarantor  "  has  no  fixed  meaning  and  liability  as 
have  the  words  "  indorser,"  "  acceptor,"  "  drawer,"  etc. 

103.  If  one  indorses  commercial  paper,  and  thus  becomes  an  "  in- 
dorser," the  courts  will  not  hear  him  when  he  attempts  to  explain  what 
he  meant  by  the  indorsement  or  what  liability  he  intended  to  assume. 
The  law  says,  "  What  the  legal  intention  and  effect  of  your  indorsement 
is  was  established  centuries  ago, — you  cannot  change  or  qualify  it  by 
what  you  meant  or  what  was  said  "  •  and  the  same  rule  applies  to  one  who 
accepts  or  draws  commercial  paper. 

104.  The  word  "  surety  "  has  also  quite  a  fixed  meaning,  although 
not  so  inflexible  a  one  as  that  of  "  indorser,"  "  acceptor,"  or  "  drawer." 
But  the  contract  of  a  guarantor  may  be  limited  or  enlarged  by  the  con- 
tract that  is  written  above  his  name;  and  the  contract  must  there  be 
written  and  in  words  that  will  express  just  what  liability  he  has  under- 
taken. The  law  will  not  spell  out  or  make  a  liability  beyond  the  one 
expressed  in  those  words. 


105.  "  A  guarantor  is  a  favorite  of  the  law."  Wherever  his  name 
appears  on  negotiable  or  non-negotiable  instruments  the  law  allows  him 
to  stand  on  the  precise  wording  of  the  guaranty  written  above  his 
name. 

106.  The  reason  given  for  this  is  that  he  is  usually  a  volunteer  to 
the  contract, — has  no  financial  interest  in  it,  has  had  no  benefit  from  it, 
and  expects  none, — and,  therefore,  he  will  not  be  bound  except  to  the 
precise  contract  that  he  signed. 

107.  Holder.  The  holder  of  commercial  paper  is  under  some  obli- 
gations to  the  parties  thereto  if  he  retains  their  liability.  See  Forms  A 
to  H,  Sees.  26,  51-54,  56-59,  150-151,  post. 

108.  The  holder  of  a  promissory  note  should  have  it  presented  at 
the  place  of  payment  on  the  day  of  its  maturity. 

109.  The  maker  or  drawer  of  the  note  will  remain  liable  thereon  if 
payment  is  not  then  and  there  demanded,  but  failure  to  so  present, — and 
in  case  of  non-payment  to  protest, — will  forever  release  the  indorser. 


no.  The  holder  of  a  check  must  have  it  promptly  presented  for 
payment  and  protested  or  the  indorsers  will  be  released.    See  Form  F. 

111.  The  drawer  or  maker  of  a  check  will  be  released  from  liability 
if  presentment  for  payment  is  iiot  promptly  made,  if  the  bank  should  fail 
and  the  depositor  should  lose  the  money  against  which  the  check  was 
drawn. 

112.  But  delay  in  presentation  to  the  bank  will  not  release  the 
drawer  or  maker  if  by  the  delay  his  money  has  not  been  lost  to  him. 

113.  The  bank  remains  liable  for  the  money  which  the  check  calls 
for  regardless  of  any  delay  in  the  presentation  of  the  check. 

114.  But  unless  the  bank  accepts  or  certifies  the  check,  it  owes  no 
duty  to  the  holder  which  the  holder  can  enforce  against  it.  {But  there 
are  exceptions  to  this  rule  in  Illinois,  Nebraska,  and  some  other  States.) 
Sec.  187,  sec.  62,  post. 

115.  If  the  bank  refuses  payment  to  the  holder  his  remedy  is  against 
the  drawer  or  maker,  who,  in  drawing  the  check,  has,  in  legal  effect, 
promised  that  the  bank  will  pay  it,  and  if  it  does  not  that  he  will. 


116.  The  holder  of  a  bill  of  exchange  owes  it  to  all  of  the  parties 
thereto,  except  the  drawee,  to  have  it  promptly  presented  to  the  drawee 
for  acceptance,  and  in  case  of  non-acceptance  to  have  it  protested  for  non- 
acceptance,  and  if  this  is  not  done  all  of  the  parties  except  the  drawee 
are  released.  (There  are  exceptions  to  this  rule  when  the  day  of  pay- 
ment of  the  bill  is  not  a  given  time  after  sight.) 

117.  When  the  day  of  payment  arrives  the  bill  must  be  presented 
for  payment  and  protested  for  non-payment  or  all  the  parties  except  the 
acceptor  will  be  released. 

HQ-  If  the  bill  has  been  properly  protested  for  non-acceptance  it 
need  not  be  presented  and  protested  for  non-payment. 

120.  Who  May  Issue  Commercial  Paper.  Any  male  person  of  full  age 
who  is  sane  or  who  is  not  under  guardianship  may  bind  himself  as  a  party 
to  negotiable  instruments. 

121.  Business  Corporations,  through  their  officers  properly  em- 
powered, can  usually  bind  themselves  as  parties  to  commercial  paper, 


f)ut,  unlike  individuals,  they  cannot  make  or  indorse  paper  simpiy  for 
the  accommodation  of  others.  Sec  Nos.  87,  4,  5,  6,  7,  8.  38,  30,  31,  29, 
32,  66. 

122.  Minora.  Minors  do  not  bind  themselves  by  becoming  parties 
to  commercial  paper,  and  it  cannot  be  enforced  against  them,  no  matter 
what  benefits  have  come  to  them  by  reason  thereof. 

123.  Women.  Women  cannot  bind  themselves  as  parties  to  com- 
mercial paper  except  in  States  where  they  are  empowered  to  do  so  by 
special  statutes. 

124.  Partners.  Each  member  of  a  trading  partnership  has  implied 
authority  to  sign,  indorse,  01  accept  commercial  paper  in  the  firm  name 
for  the  purposes  of  the  partnership  business. 

125.  The  presumption  is  that  paper  so  signed  is  for  the  business  of 
tlie  partnership  unless  there  is  something  on  the  face  of  the  paper  that 
would  indicate  otherwise. 


126  Trading  Partnerships.  There  is  no  distinct  line  that  can 
be  drawn  between  trading  and  non-trading  partnerships.  Practically 
all  manufacturing  and  mercantile  partnerships  are  trading  partner- 
ships. 

127.  Partnerships  between  lawyers,  doctors,  architects,  etc.,  for  the 
practicing  of  their  profession  would  not  be  trading  partnerships,  and 
this  has  been  held  to  include  real  estate  agents,  insurance  agents,  and 
publishers,  and  such  non-trading  partnerships  do  not  have  implied  power 
to  issue  or  indorse  commercial  paper. 

128.  Delivery.  Commercial  paper  binds  the  maker  only  from  the 
time  he  voluntarily  parts  with  possession  of  it  with  the  intention  that 
it  be  delivered  to  the  payee  or  the  party  intended  by  the  maker  to  put 
it  in  circulation.  It  is  a  nullity  until  that  time,  and  if  it  be  taken  from 
the  maker  before  that  time  it  is  worthless  even  in  the  hands  of  an  inno- 
cent purchaser. 

Z2'>.  But  if  after  its  delivery  it  was  stolen  from  the  payee  or  a  subr 


se(|uent  owner,  and  it  then  came  into  the  hands  of  an  innocent  purchaser, 
he  could  enforce  it  against  the  maker  for  his  own  benefit. 

130.  This  rule  as  to  delivery  applies  to  the  habihty  of  an  indorser; — 
and  if  the  payee  or  subsequent  owner  of  a  note  should  write  his  name 
on  the  bacic  thereof  with  intention  to  negotiate  the  note,  and  before  he 
had  voluntarily  parted  with  possession  of  it  an  innocent  purchaser 
bought  it,  such  purchaser  could  not  enforce  it  against  such  indorser,  al- 
though he  could  enforce  it  against  the  maker  and  any  previous  indorsers. 

131.  Negotiation.  Tile  negotiation  of  the  instrument  is  the  act  or 
acts  by  which  the  ownership  and  complete  title  are  passed  from  the 
owner  to  another,  and  in  such  a  manner  as  to  preserve  the  negotiabiHty 
of  the  paper. 

132.  This  is  done  by  the  owner  voluntarily  parting  with  it  with  in- 
tention that  it  pass  to  another ;  and,  if  the  instrument  is  payable  on  its 
face  or  by  an  indorsement  on  the  back  to  his  order,  by  his  indorsing  it. 
Such  indorsement  may  be  by  writing  his  name  in  blank  on  the  back  of 


this  note  fa  blank  indorsement)  or  by  writing  above  his  name  on  the 
back  the  words  "  Pay  to  the  order  of  (A,  Adams)," — (an  indorsement  in 
full — or  special  indorsement). 

133.  If  the  instrument  is  payable  to  bearer, — either  originally  or  by 
subsequent  indorsement, — the  negotiation  is  complete  without  any  fur- 
ther indorsement  by  the  one  who  is  transferring  it, — it  can  be  negotiated 
then  by  mere  delivery.    See  Forms  L,  A,  B,  C,  K,  J. 

134.  Consideration.  In  order  to  bind  the  maker,  drawer,  indorser, 
or  acceptor  of  commercial  paper  there  must  have  been  a  consideration 
for  the  drawing,  making,  indorsing,  or  accepting  of  the  paper. 

I35-  But  when  the  instrument  is  in  the  hands  of  a  bona-fide  pur- 
chaser this  does  not  mean  that  the  maker,  drawer,  indorser,  or  acceptor 
necessarily  received  some  consideration  for  the  obligation  he  entered 
into  or  that  the  consideration  was  full  or  valuable  to  him. 

136.  It  sufficed  as  a  consideration  that  the  holder,  seeing  their 
names  or  any  of  them  on  the  paper,  paid  something  of  value  for  it.  or 


put  himself  to  some  risk  or  disadvantage  on  the  strength  of  their 
names — and  tl»e  risk  or  disadvantage  may  have  been  as  to  matters 
wholly  disconnected  with  the  paper  or  the  parties  whose  names  appear 
thereon. 

137.  It  is  thus  seen  that  the  question  of  consideration  is  not  one 
that  enters  largely  into  the  negotiation  of  commercial  paper.  Such 
question  usually  arises  between  the  maker  and  the  payee  of  the  note ; — 
and  those  parties  in  actions  between  themselves  do  not  have  many  of  the 
special  advantages  of  the  laws  particularly  applicable  to  commercial 
paper. 

138.  If  the  consideration  for  the  instrument  arose  wholly  or  in  part 
out  of  some  illegal  transaction  no  part  of  the  instrument  can  be  enforced, 
even  if  the  obligor  received  ample  consideration, 

139  This  has  been  held  as  to  notes  given  for  money  to  be  used  in 
gambling;  for  the  profits  or  losses  in  gambling  speculations  in  stocks 
or  products  which  come  under  the  name  of  futures  or  options;  for 


liquor  sold  in  violation  of  law ;  for  the  suppression  of  a  criminal  prose- 
cution. 

140.  But  such  notes  are  usually  good  in  the  hands  of  a  purchaser 
without  knowledge  of  the  consideration. 

141.  It  is  only  in  a  few  States  that  an  instrument  fair  on  its  face  is 
declared  void  in  the  hands  of  a  bona-fide  purchaser  for  the  reason  that 
the  consideration  or  the  transaction  is  in  violation  of  law. 

142.  In  New  York  State  a  note  out  of  which  the  original  holder  took, 
or  agreed  to  take,  more  than  the  legal  rate  of  interest  is  utterly  void, 
even  in  the  hands  of  an  innocent  purchaser,  but  this  law  does  not  apply 
to  instruments  to  which  a  bank  or  banker  was  the  original  holder. 

143.  Consideration-Gift.  The  defense  of  "  no  consideration  "  often 
comes  up  where  commercial  paper  is  made  the  subject  of  a  gift. 

144.  Where  the  maker  executes  and  delivers  his  own  note  to  the 
donee,  as  a  gift,  the  note  cannot  be  enforced  by  the  recipient  or  by  any 
one  who  has  knowledge  that  the  consideration  was  a  gift. 


145'  But  where  the  donor  delivers  commercial  paper  made  by  a 
rhird  party  to  the  donee  the  latter,  or  one  who  takes  title  from  him,  can 
hold  it  and  enforce  it. 

146.  The  donor's  own  check  as  a  gift  is  not  effective  until  paid,  and 
the  donor  can  revoke  the  gift  and  stop  payment  at  any  time  before  the 
check  is  transferred  or  paid. 

147.  The  donor's  own  note  or  check,  as  a  gift,  becomes  ineffectual 
on  his  death ;  but  not  so  the  commercial  paper  of  a  third  party  which  has 
been  properly  delivered  before  death.  Where  the  commercial  paper  of 
another  is  made  the  subject  of  a  gift,  the  gift  must  be  perfected  before 
the  death  of  the  donor, — the  recipient  of  the  gift  must  have  come  into 
full  possession  and  control  of  the  paper  during  the  life  of  the  giver. 

« I48.  A  gift  to  take  effect  after  the  death  of  the  giver,  the  giver  to 
retain  possession  and  control  of  the  property  during  Hfe,  is  ineffectual  no 
matter  how  fully  it  can  be  proved, — unless  such  gift  is  the  part  of  a 
regularly  executed  will. 


149.  Inceptioii.  An  instrument  does  not  have  its  inception  until 
the  maker  has  executed  it  and  parted  with  possession  of  it  with  intention 
that  it  be  put  in  circulation,  and  until  some  one  has  taken  it  for  a  legal 
consideration :  it  is  at  this  last  point  that  it  has  inception. 

150.  Release  of  Parties.  Payment  of  commercial  paper  or  its  volun- 
tary surrender  to  the  principal  obligor,  by  the  holder,  will  discharge  all 
parties  to  it.  An  unintentional  surrender  or  cancellation  will  not  release 
the  principal  obligor,  nor  will  it  release  the  other  parties  if  their  rights 
or  remedies  have  not  been  prejudiced  thereby. 

IS'-  A  release  of  security  controlled  by  the  holder  or  a  compromise 
with  the  principal  obligor  will  release  all  of  the  other  parties 

152.  A  release  of  one  indorser  will  release  all  those  who  have  in- 
dorsed under  him, — but  not  those  who  have  indorsed  above  him  or  who 
are  liable  by  reason  of  their  having  written  their  names  on  the  face  of 
the  paper. 

153.  An  enforceable  agreement  to  extend  the  time  of  payment  to 


the  principal  obligor  will  release  all  of  the  other  parties  who  did  not 
agree  to  it.  This  agreement  need  not  be  a  direct  one,  and  it  is  a  source 
through  which  many  indorsers  are  unwittingly  discharged  from  all  lia- 
bility.   Sec.  120,  post. 

154.  When  the  debt  has  matured  the  holder  cannot  extend  the  time 
of  payment  one  day  even  to  the  maker  or  principal  obligor  without  re- 
leasing the  indorser. 

t5S.  The  maker  may  wait.  He  may  refrain  from  taking  any  steps 
whatever  against  any  of  the  parties  to  the  paper ;  he  may  fold  his  hands, 
and  thus  let  the  parties  gain  time,  but  he  must  not  affirmatively  grant  it. 

156.  In  a  few  States  the  holder  must  proceed  against  the  maker  in 
the  courts  at  the  first  term  of  court  after  the  maturity  of  the  paper :  but 
in  a  majority  of  the  States  the  holder  owes  no  active  duty  to  the  indorser. 
If  the  indorser  is  in  a  hurry  he  can  take  up  the  paper  and  sue  the  maker 
or  prior  indorsers.    See  No.  123. 

157.  The  holder  of  an  indorsed  note  must  not,  after  the  maturity  of 


the  note,  take  mterest  to  a  future  time,  but  he  may  accept  partial  pay- 
ments of  principal  or  interest  that  have  accrued. 

158.  He  must  not  make  any  bargain  or  enter  into  any  transaction  by 
which  the  maker  or  principal  obligor  can  show  that  the  holder's  right  to 
proceed  against  him  has  been  suspended  for  a  day. 

159.  Any  party  to  past-due  commercial  pape>-  can  pay  the  amount 
due  thereon  to  the  holder  and  demand  a  delivery  of  the  paper  to  him- 
self; and  after  he  has  come  into  possession  of  it  he  can  enforce  it  to  its 
full  amount  against  any  party  whose  liability  precedes  his. 

160.  Such  action  by  any  party  to  the  instrument  discharges  all  par- 
ties whose  liability  is  subsequent  to  his. 

161.  But  in  that  event  he  has  lost  nothing,  as  no  indorser  can  ever 
gain  any  benefit  or  contribution  from  parties  whose  liability  is  subse- 
quent to  his. 

162.  Protest.  The  protesting  of  a  dishonored  instrument. — an  acc 
which  is  performed  by  a  notary  public,  but  which  under  certain  circum- 


stances  can  be  performed  by  an  individual,  is  an  act  done  to  preveiit  tlie 
release  of  the  indorsers  of  all  negotiable  instruments  and  also  the  drawers 
of  bills  of  exchange,  as  sucli  parties  are  discharged  if  the  instrument  is 
not  protested.    Sec.  112,  post. 

163.  On  the  day  of  the  maturity  of  all  negotiable  instruments,  and 
on  the  day  when  a  bill  of  exchange  should  be  presented  for  acceptance, 
the  notary,  with  the  instrument  in  his  possession,  must  present  it  at  the 
place  where  it  is  drawn  payable,  and  demand  acceptance  or  payment,  as 
the  case  may  be, — and  on  failure  to  receive  payment  thereon,  he  is  re- 
quired to  notify,  by  mail  or  in  person,  the  indorsers  and  drawers,  of  the 
non-payment,  and  make  some  formal  entries  of  his  official  acts. 

164.  If  no  place  of  payment  is  mentioned  in  the  instrument  it  must 
be  presented  at  the  place  of  business  of  the  person  required  to  pay, — 
the  drawee  of  the  bill  or  the  maker  of  the  note,  and  if  there  is  no  such 
place  of  business  then  at  his  residence.  If  the  instrument  be  lost  the 
notary  may  make  the  demand  by  copy  or  description. 


165.  There  is  only  one  day  on  which  the  presentment  and  demand 
of  payment  and  formal  protest  can  be  made, — the  last  day  of  maturity 
of  the  instrument.    See  page  50. 

166.  Contribution.  Where  several  parties  have  signed  a  note  under 
the  implied  or  express  agreement  among  themselves  that  each  shall  be 
liable  for  only  his  proportionate  share  thereof,  and  the  holder  of  the 
note  is  not  a  party  to  the  agreement,  he  can  collect  the  full  amount  from 
any  one  of  them,  and  such  one  can  then  force  proportionate  contribution 
from  the  others.  If  some  of  the  others  are  insolvent  the  solvent  ones 
must  bear  the  whole  loss  share  and  share  alik...    See  Forms  U,  H. 

167.  Time.  A  negotiable  instrument  that  is  silent  as  to  time  of  pay- 
ment, is  payable  on  demand,  without  grace,  and  must  be  presented  for 
payment  forthwith  and  protested,  if  the  indorsers  (or  the  drawer  of  a  bill 
of  exchange)  are  to  remain  liable  thereon. 

-  168.  On  Demand.  An  instrument  written  payable  "  on  demand," 
is  payable  forthwith  and  must  be  presented  as  above. 


169.  At  Sig&T.  An  instrument  payable  "  at  sight,"  is  payable  as  is 
one  written  payable  on  demand,  and  must  have  the  same  prompt  pre- 
sentment. In  a  few  States  negotiable  instruments  written  payable  at 
sight  are  entitled  to  grace. 

170.  Months.  WTiere  an  instrument  is  payable  a  certain  number  of 
months  after  date,  calendar  months  are  meant. 

171.  A  note  dated  February  20,  payable  in  three  months,  is  due 
May  20. 

172.  Where  an  instrument  is  payable  so  many  months  after  date, 
calendar  months  are  meant.  Thus  a  note  dated  January  31,  payable  one 
month  after  date,  is  due  the  last  day  of  February.  A  note  dated  Feb- 
ruary 28,  payable  in  eleven  months,  is  due  January  28.  Where  days 
are  expressed,  Sundays  and  holidays  are  included,  and  in  the  computa- 
tion the  day  of  date  is  excluded  and  the  whole  of  the  last  day  is  included. 
A.  note  dated  May  28,  payable  in  sixty  days,  is  due  July  27. 

173.  Days.  Where  the  payment  is  a  certain  number  of  days  after 


date,  the  actual  number  of  days  is  computed,  including  Sundays  and 
holidays. 

174.  In  the  computation  the  day  of  date  is  omitted  and  the  payor 
has  all  of  the  last  day  in  which  to  make  payment. 

17s.  An  instrument  dated  May  20,  payable  in  go  days,  in  States 
where  grace  is  not  allowed,  is  due  August  18.  Thus: 

Days  in  May  after  May  20th   11 

Days  in  June   30 

Days  in  July   31 

Days  in  August  to  make  the  whole  number  90. .  18 

90 

176.  In  computing  time  the  law  does  not  contemplate  fractioni  of 

days. 


(  177-  Inconsistent  Dates.  Where  two  dates  are  given,  one  the  day 
I  of  the  week  and  one  the  day  of  the  month,  and  they  are  inconsistent,  the 
I    day  of  the  month  will  govern. 

I  178.  Holidays.    Time  instruments  falling  due  on  Sunday  or  a  holi- 

day are  payable  the  next  business  day,  and  this  rule  applies  to  Saturday 
(    where  Saturday  is  a  half-holiday. 

t  179.  The  holder  of  a  check  or  an  instrument  payable  on  demand 
p  may  present  it  for  payment  during  business  hours  of  a  Saturday  half- 
(  holiday,  but  failure  so  to  do  is  not  negligence  on  his  part.  This  is  the 
(   rule  as  to  commercial  paper. 

n         180.  Other  private  contracts  which  would  fail  if  not  performed  on 
a  date  certain,  and  that  day  is  a  holiday,  must  be  performed  on  that  day. 
b         181.  This  rule  does  not  of  course  apply  to  Sundays,  in  which  case 
tf  performance  can  be  made  on  Monday. 

p  I  182.  Grace.  Except  in  States  where  the  rule  has  been  changed  by 
n.|  special  statute,  a  negotiable  instrument  payable  at  a  future  time  is  not 


due  and  payable  until  the  expiration  of  three  additional  days  following 
the  time  of  maturity  as  expressly  stated  in  the  instrument.  These  three 
days  are  termed  "  days  of  grace." 

183.  They  came  into  the  law  at  a  time  when  the  means  of  transpor- 
tation and  communication  were  indirect  and  uncertain. 

184.  They  are  gradually  being  abolished,  by  statute,  in  the  several 
States,  but  in  many  they  yet  prevail. 

183.  In  such  States,  if  a  negotiable  instrument  is  written  payable 
ninety  days  after  date,  it  is  not  due  until  ninety-three  days  after  date, 
and  if  the  time  of  payment  is  specifically  fixed  by  drawing  the  instrument 
payable  at  a  fixed  future  date,  as  "  July  20th,  1903,  pay,"  etc.,  the  instru- 
ment is  not  due  until  July  23d. 

186.  Accommodation  Paper.  Accommodation  negotiable  instru- 
ments, or  indorsements  thereon,  are  those  made  by  one  person  for  the 
accommodation  of  another.  " 

187.  This  in  no  way  affects  their  validity  as  negotiable  instruments 


,vhen  they  are  in  the  hands  of  third  parties,  even  if  such  third  parties 
know  that  the  paper  was  made  or  indorsed  solely  as  an  accommodation. 

i88.  But  corporations  cannot  bind  themselves  as  makers,  indorsers, 
or  acceptors  of  accommodation  commercial  paper.  Sec.  29,  post. 


189.  Neither  can  one  partner  bind  the  firm  to  such  paper ;  but  if  all 
of  the  partners  consent,  then  the  firm  is  bound.  » 


SI 


CHECK. 


All  IMknical  requirements  of  a  negotiible  instrument,  hereinbefore  mentioned,  must  be  observed  in  issuing  and  negotiating  checlss. 


190.  Check.  A  check  differs  from  a  bill  ot  exchange  or  draft  in  that 
I  it  is  always  drawn  on  a  bank,  banker,  or  banking  institution,  and  in  that 
h  it  is  always  payable  on  demand,  and  in  that  it  always  purports  to  be  drawn 
li   ag-ainst  a  deposit  of  funds.  The  negotiable  instruments  law  says  "  a  check 

is  a  bill  of  exchange  drawn  on  a  bank  payable  on  demand."    Sec.  185. 
a         191.  The  fact  that  the  instrument  is  drawn  by  one  bank  on  another 
makes  it  no  less  a  check,  even  if  drawn  in  the  usual  form  of  a  bill  of 
p   exchange  or  draft. 

192.  Post-dated  Check.    If  an  order  in  the  form  of  a  check  is  dated 
Isf  ahead  it  is  treated  as  a  bill  of  exchange,  except  that  it  is  never  entitled 
*o  grace.     Except  as  the  foregoing  definition  from  the  negotiable 


instruments  law  may  have  changed  the  rule  where  that  law  is  in  force. 

193.  But  it  is  held  that  if  a  date  of  payment  is  indicated  in  the  body 
of  the  check,  it  is  entitled  to  grace  in  States  where  grace  is  allowed 
on  negotiable  instruments. 

194.  Death  of  Drawer.  The  death  of  the  drawer  usually  revokes  the 
authority  of  the  bank  to  pay  the  check,  and  it  has  been  held  that  bank- 
ruptcy or  an  assignment  for  the  benefit  of  creditors  has  the  same  effect. 

195.  Check  Not  An  Assignment.  A  check  does  not  operate  as  an 
assignment  to  the  holder  of  the  amount  of  the  depositor's  money  that  it 
calls  for,  and  if  the  bank  refuses  to  pay  it  the  holder  has  no  right  of 
action  against  the  bank, — his  remedy  is  against  the  drawer, — the  latter 


IS  the  only  person  who  has  right  of  action  against  the  bank.  See  Form  A. 

196.  This  is  the  rule  in  most  of  the  States,  and  the  Negotiable  In- 
struments Law  so  provides.    Sec.  189. 

197.  For  Georgia  and  Texas  see  the  statutes  of  those  States. 

198.  Thus,  although  banks  should  pay  checks  in  the  order  of  their 
presentation,  they  need  not  do  so,  and  the  drawer  is  the  only  one  that 
can  legally  complain  if  they  do  not. 

199.  Duty  of  Holder.  Presentation.  So  far  as  the  drawer  of  the 
check  is  concerned,  the  holder  need  not  present  the  check  within  a  rea- 
sonable time,  and  the  drawer  will  continue  liable  for  the  amount  unless 
he  can  show  actual  loss  or  damage  by  failure  of  the  bank,  or  otherwise. 

200.  But  in  order  to  hold  the  indorser  the  check  should  be  presented 
the  day  it  is  delivered  to  the  payee, — and  it  must  be  presented  by  the  fol- 
lowing day, — if  the  payee  lives  in  the  same  place  as  the  location  of  the 
bank.    See  Form  F. 


201.  If  the  bank  is  in  another  place,  the  payee  must  start  it  for  col- 
lection not  later  than  the  time  of  the  last  mail  of  the  day  succeeding  the 
day  he  received  it,  and  the  bank  that  receives  it  on  this  second  day  must 
forward  it  that  day. 

202.  To  send  it  for  collection  through  various  banks  or  parties  in 
various  places  is  deemed  negligence,  if  the  time  of  presentation  is  thereby 
delayed. 

203.  If  the  check  is  sent  to  an  agent  for  collection,  he  is  bound  to 
present  it  on  the  day  of  its  receipt,  if  received  in  business  hours. 

204.  Sundays  and  holidays  are  not  counted  as  days  under  this  rule. 

205.  Partial  Payments.  A  bank  is  not  bound  to  make  partial  pay- 
ment on  a  check  if  the  depositor  has  not  enough  funds  to  make  payment 
in  full. 

206.  Payment  Stopped.  At  any  time  before  a  bank  has  accepted  a 
check  it  must  not  pay  it  if  the  maker  stops  payment. 

207.  Certified  Check — ^Liability  of  Parties.  If  the  bank  accepts  or  cer- 


<^es  the  ciieck  at  the  request  of  the  payee  or  Iiis  successors  in  title,  the 
drawer  and  the  indorsers  are  thereby  released  and  the  bank  becomes  the 
only  one  liable  for  its  payment.    See  Form  G.  No.  75. 

208.  But  this  is  not  the  rule  if  the  drawer  procures  its  acceptance 
before  its  delivery  to  the  payee. 

209.  Verbal  Acceptance,  A  verbal  acceptance  or  certification  will 
bind  the  bank  if  the  drawer  has  funds  on  hand  sufficient  to  pay  it.  59 
Barb.  (N.  Y.)  226:  118  Mass.  S39.»75  111.  505;  46  Conn,  go:  18  Wall 
(U.  S.)  604:  30  N.  H.  256:  and  this  is  so  held  as  to  certification  by  tele- 
graph.   51  Fed.  168. 

210.  Forgery.  A  bank  in  certifying  or  paying  a  check  cannot  be 
heard  to  complain  against  an  innocent  party  if  the  drawer's  signature  is 
forged;  the  loss  in  such  cases  falls  on  the  bank.    See  Form  G. 

211.  But  a  bank  in  paying  or  certifying  a  check  does  not  warrant 
I  the  genuineness  of  the  body  of  the  check  or  of  any  of  the  indorsements 


thereon, — on  the  contrary,  the  person  presenting  the  check  for  payment 
warrants  these  matters  to  the  bank,  whether  he  indorses  the  check  or 
not.   See  No.  75.  * 

212.  Payment  Rescinded.  If  a  bank  once  pays  a  check  to  the  holder 
without  fraud  on  his  part,  it  cannot  recover  the  money  on  the  ground 
that  it  paid  under  a  mistake  as  to  the  amount  standing  to  the  drawer's 
credit. 

213.  But  it  is  held  that  by  simply  giving  a  depositor  credit  for  the 
check,  on  his  pass  book,  without  more,  the  bank  can  rescind  the  credit 
any  time  that  day  if  the  credit  was  made  under  mistake  as  to  the 
condition  of  the  drawer's  account.  51  Cal.  64.  Text-writers  and  some 
courts  hold  to  this  doctrine. 

214.  The  New  York  courts  seem  to  hold  to  the  contrary.  45  N.  Y. 
741.    See  No.  127. 

213.  Certified  Check.    A  bank  in  certifying  a  check  says,  in  legal. 


effect,  to  the  bona-fide  holder  thereof,  "  The  signature  of  the  drawer  of 
this  checl<  is  genuine,  and  if  it  turns  out  to  be  forged  it  is  our  loss,  not 
yours ;  the  drawer  has  enough  money  here  to  pay  it,  and  we  will  retain 
the  money  and  apply  it  for  that  purpose  only,  and  if  we  should  fail  so 
to  do  we,  nevertheless,  will  pay  the  check;  but  if  it  should  develop  either 
before  or  after  the  actual  payment  of  the  check  that  the  amount  has 
been  fraudulently  raised, — either  before  or  after  our  certification, — we 
will  pay  only  the  amount  it  was  originally  issued  for;  and  if  we  have 
paid  more  than  the  latter  you  will  have  to  make  good  the  difference. 
Further,  we  have  said  and  warranted  to  you  that  the  signature  of  the 
drawer  was  genuine  (that  we  are  supposed  to  know),  but  we  do  not 
know  anything  about  the  genuineness  of  the  signatures  of  the  indorsers 
on  the  check,  and  you,  in  asking  for  this  certification,  or  for  subsequent 
payment  thereunder,  have  said,  in  law,  to  us  that  the  indorsers'  signa- 


tures are  correct,  and  if  they  are  not  that  you  will  make  good  to  us  any 
loss  by  reason  thereof."  i8  Wall  (U.  S.)  604:  64  N.  Y.  316:  67  N.  Y. 
458:  67  Ind.  500:  42  111.  245:  30  Md.  II :  16  N.  Y.  125. 

216.  A  bank  is  not  bound  to  know  the  genuineness  of  the  signature 
of  the  indorser,  but  it  is  held  that  if  it  certifies  the  check  without  any 
indorsement  on  it,  it  will  have  to  pay  it  to  the  bona-fide  holder,  and 
procure  the  indorsement,  if  necessary,  as  best  it  may.  107  N.  Y.  183. 
See  Form  G,  No.  75. 

217.  The  certification  of  a  check  dated  ahead  does  not  bind  the  bank. 
52  Barb.  (N.  Y.)  592. 

218.  An  officer  cannot  certify  his  own  check  and  bind  the  bank 
thereby.    25  N.  Y.  294. 

219.  The  president,  cashier,  or  teller  may  certify.  114  N.  Y.  70: 
25  N.  Y.  293 :  110  U.  S.  7. 


BILL  OF  EXCHANGE. 


Form  C. 

Alt  technical  requirements  of  a  negotiable  instrument,  hereinbefore  mentioned,  must  be  observed  in  issuing  and  negotiating  bills  of  exchange. 


320.  Bill  of  Eichauge.  A  bill  of  exchange  is  an  order  drawn  by  one 
person  on  another  directing  the  payment  on  demand  or  at  a  future  time 
of  the  sum  of  money  therein  mentioned. 

221.  Inland — Foreign  Bills.  An  inland  bill  of  exchange  in  the 
United  States  is  one  drawn  in  one  State  and  payable  in  that  State. 

222.  A  foreign  bill  is  one  drawn  in  one  State  and  payable  in  another 
State  or  another  country. 

223.  Consideration.  It  is  usually  drawn  against  commodities  sold 
and  delivered,  or  about  to  be  delivered  by  the  drawer  to  the  drawee,  but 
this  is  not  necessarily  so. 

224.  It  is  not  usually  drawn  against  a  deposit  of  money,  but  it  may 


be,  and  it  may  also  be  drawn  and  accepted  as  an  accommodation  by  the 
drawee  to  the  drawer  without  any  consideration  passing.  It  will  be 
valid  in  either  instance. 

225.  Order  of  Liability.  Until  a  bill  of  exchange  is  accepted  the 
drawer  is  as  between  the  parties,  the  person  primarily  liable  on  it,  and 
the  liability  of  the  indorsers  follows  in  the  order  in  which  they  appear  on 
the  bill.    See  Forms  C,  H. 

226.  After  its  acceptance  the  acceptor  becomes  the  person  primarily 
liable  and  the  drawer's  liability  follows,  and  then  the  indorsers  in  their 
order.  ' 

227.  This  is  the  rule  as  to  the  persons  whose  names  appear  on  the 


bill,  but  the  holder  does  not  have  to  recognize  this  order  of  liability.  He 
may  proceed  against  any  or  all  of  them  irrespective  of  their  liability 
among  themselves,  or  the  order  in  which  their  names  appear. 

228.  Warranty  of  the  Parties.  The  drawer  warrants  to  the  indorsers 
and  to  the  holder  that  the  drawee  will  accept  and  pay,  and  if  the  drawee 
does  not,  that  he,  the  drawer,  will  pay  if  the  bill  is  duly  and  properly 
presented  and  protested. 

229.  Each  indorser  warrants  the  same  to  the  holder  and  to  each 
subsequent  indorser — but  not  to  the  maker. 

23"  The  drawee  is  bound  to  know  the  drawer's  signature,  and  if 
it  is  forged  he  has  no  recourse  against  an  innocent  party. 

231.  The  holder  warrants  the  signature  of  the  indorsers,  and  this 
warranty  does  not  cease  on  the  payment  of  the  instrument. 

232.  Duty  of  Holder— Protest.  The  duty  of  the  holder  of  the  bill 
IS  to  forward  it  without  delay  for  acceptance  by  the  drawee,  and  after 
icceptance  to  have  it  duly  presented  for  payment.    If  the  dr?.wee  refuses 


lo  accept,  or  it  he  accepts  and  refuses  to  pay,  the  drawer  and  indorsers 
must  in  each  instance  be  notified  of  the  fact  and  the  bill  duly  protested 
or  they  will  be  released  from  all  liability. 

233.  The  drawers  or  makers  of  a  note  are  not  released  if  they  are 
not  notified  of  its  dishonor,— not  so  the  drawers  or  makers  of  the  bill  of 
exchange  or  draft. 

234.  Acceptance.  The  holder  of  the  bill  or  draft,  or  his  agent,  must 
demand  an  unconditional,  unqualified  acceptance  of  the  draft,— an  ac- 
ceptance that  does  not  vary  the  time  or  place  of  payment,  nor  ihe 
amount,  nor  the  terms  of  the  bill  in  any  particular.  See  Nos.  5,  17,  18 
19,  105,  no. 

23s.  The  acceptance  should  be  in  writing  and  signed  by  the  drawee. 

236.  Tt  is  usual  to  have  it  written  on  the  face  of  the  bill,  but  it  is 
sufficient  if  it  appear  anywhere  thereon.  No  particular  words  or  phrases 
are  necessary.  It  is  usual  to  write  "  Accepted," — followed  by  the  date 
and  the  name  of  the  acceptor. 


237-  It  is  said  that  the  holder  need  not  accept  an  acceptance  signed 
Dy  an  agent  of  the  drawee, —  that  he  can  demand  the  drawee's  own  sig- 
nature. 

238.  The  bill  is  often  accepted  before  it  leaves  the  drawer's  hands, 
but  this  19-  in  no  way  prejudicial  to  it. 

239.  Time  to  Decide.    A  drawee  has  twenty-four  hours  after  a  bill 


is  presented  to  him  in  which  to  decide  whether  he  will  accept  or  not ;  but 
this  time  provision  does  not  apply  to  checks  or  instruments  payable  on 
demand  and  not  requiring  acceptance. 

240.  Where  such  time  is  taken,  the  acceptance,  if  dated,  must  be 
dated  as  of  the  day  of  presentation. 


at 
th 


DRAFT. 


Form  D. 


241.  Draft.  The  word  draft  is  indiscriminately  applied  to  checks, 
bills  of  exchange,  or  to  non-negotiable  orders  for  the  payment  of  money. 

242.  This  application  of  the  word  is  not  entirely  erroneous,  but  it  is 
more  correctly  applied  to  instruments  in  the  form  of  bills  of  exchange, 
that  are  drawn  for  the  purpose  of  collecting  for  the  drawer's  own  use 
and  account  sums  of  money  due  him  from  sundry  persons. 

243.  If  the  drawer  procures  money  on  draft  before  it  is  paid  it  be- 
comes, technically,  a  bill  of  exchange. 

344.  The  payee  of  the  draft  is  usually  the  person  or  institution  dele- 


gated by  the  drawer  to  make  the  collection,  and  it  is  delivered  or  sent 
by  mail  to  the  payee  for  that  purpose.  Banks  or  express  companies 
usually  perform  this  service,  making  a  small  charge  therefor. 

24s.  The  drawer  often  places  such  drafts  with  his  bank  for  collec- 
tion ;  but  in  many  instances  the  drawer  draws  them  payable  to  some  bank 
in  the  place  where  the  debtor  lives,  and  mails  them  to  such  bank  with 
the  request  that  the  bank  collect  and  remit  the  amount  less  colIecr.cn 
charges. 


PROMISSORY  NOTE. 

Form  B. 

All  lechnical  requirements  ot  a  negotiable  instrument,  hereinbefore  mentioned,  must  be  observed  in  issuing  and  negotiating  promissory  notes. 

246.  Promissory  Note.  A  negotiable  promissory  note  is  an  uncon-  I  maker,  in  which  the  maker  engages  to  pay  on  demand  or  at  a  fixed 
ditional  written  promise  made  by  one  person  to  another,  signed  by  the  |  determinable  future  time  a  sum  certain  in  money  to  bearer  or  to  order. 


PROTEST. 

The  protesting  of  a  dishonored  instrument — an  act  which  is  per-  |  of  exchange  and  checks,  as  such  parties  are  discharged  if  the  instrument 
formed  by  a  notary  public,  but  which  under  certain  circumstances  can     is  not  protested,  ivhen  protest  is  required. 

be  performed  by  another  person — is  an  act  done  to  prevent  the  release  On  the  day  of  the  maturity  of  all  negotiable  instruments,  and  on 

I   'of  the  indorsers  of  all  negotiable  instruments  and  also  the  drawers  of  bills  I  the  day  when  a  bill  of  exchange  should  be  presented  for  acceptance,  the 


notary,  with  the  instrument  in  his  possession,  must  present  it  at  the  place 
where  it  is  drawn  payable,  and  demand  acceptance  or  payment,  as  the 
case  may  be, — and  on  failure  to  receive  acceptance  or  payment  thereon, 
he  is  required  to  notify,  by  mail  or  in  person,  the  indorsers  and  drawers 
of  the  demand  and  non-payment,  and  formally  protest  the  instrument. 

If  no  place  of  payment  is  mentioned  in  the  instrument  it  must  be 
presented  to  the  place  of  business  of  the  person  required  to  pay, — the 
drawee  of  the  bill  or  the  maker  of  the  note,  and  if  there  is  no  such  place 
of  business  then  at  his  residence.  If  the  instrument  is  lost  it  can  be  pre- 
senled  and  protested  by  copy  or  description.  The  demand  should  be 
made  personally  of  the  party  required  to  pay  or  accept,  and  if  he  be  not 
present,  then  of  some  person  in  charge  of  the  office  or  premises.  If  no 
person  is  present  the  demand  can  be  made  of  "  to  whom  it  may  concern." 

The  notary  must  then,  that  day.  note  on  the  instrument  the  fact 
that  oi  Hia*  date  he  had  protested  the  instrument  for  non-acceptance 
or  non-payment,  as  the  case  may  be.    Then,  and  in  any  case  not  later 


than  during  business  hours  of  the  next  day  or  not  later  tha  lie  last 
outgoing  mail  of  such  day,  notice  of  demand,  non-paymer  >r  non- 
acceptance  and  of  protest  must  be  mailed  to  each  of  the  pa  s  to  the 
instrument.  If  affi.xed  to  any  name  is  a  post-office  address  e  notice 
must  be  mailed,  post  paid,  to  that  address.  If  no  address  is  en,  then 
inquiry  must  be  made  as  to  the  business  place  or  residence  (  le  parties 
and  the  notice  sent  there.  If  no  address  can  be  found,  a  nc  s  for  such 
party  or  parties  must  be  mailed  to  the  owner  or  last  indo  r.  Where 
there  is  doubt  as  to  the  post-olfice  address  of  a  party,  it  is  'tomary,  as 
a  precautionary  measure,  to  mail  several  notices  at  diffe  t  places  or 
enclosed  to  different  persons.  If  any  of  the  parties  are  -ad,  inquiry 
must  be  made  as  to  their  personal  representatives  and  m  e  be  sent  to 
such  representatives,  and  if  no  personal  representative  '  .ound  notice 
must  be  sent  to  the  last  residence  or  place  of  business  of    ^  deceased.- 

There  is  no  particular  form  of  notice  required. — it  i  '"'y  necessary 
that  it  conveys  information  sufficient  to  acquaint  the  par    of  the  demand 


ind  nor.  yment  of  t'ue  particular  instrument.  It  will  be  sufficient  to 
have  the  tice  read,  for  instance:  "  Canisteo,  N.  Y.,  Sept.  i,  1902.  N. 
C.  Taylo  "anisteo,  N.  Y.  Please  take  notice  that  a  promissory  note 
made  by  'otson  &  Vorhis,  dated  July  i,  1902,  due  this  day,  for  one 
thousand  lars,  and  indorsed  by  you,  has  this  day  been  protested  for 
iion-paym  and  that  the  holders  look  to  you  for  payment  thereof,  pay- 
ment of  th  ame  having  been  duly  demanded  and  refused.  John  D. 
Moore,  No  ;  Public."  Notice  of  protest  can  be  delivered  personally, 
and  oral  noi      may  be  sufficient. 

At  any     bsequent  time  the  notary  issues  a  certificate  of  protest 


under  his  hand  and  seal,  to  which  is  attached  the  instrument  or  a  copy 
thereof  or  both. 

The  certificate  must  specify  the  time  and  place  of  presentment,  the 
fact  of  presentment  and  the  manner  thereof,  the  cause  or  reason  for  pro- 
testing the  bill,  the  demand  made  and  the  answer  given,  if  any,  or  the 
fact  that  the  drawee  or  acceptor  could  not  be  found. 

Protest  may  be  made  by:  A  notary  public,  or  by  any  respectable 
resident  of  the  place  where  the  bill  is  dishonored,  in  the  presence  of  two 
or  more  credible  witnesses.  Sec.  154. 


LAW. 


The  rules    d  methods  by  which  society  compels  or  restrains  the  action  of  its  members. — Bouv.  Law  Diet. 


COMMON  LAW. 


Those  principles,  usages,  and  rules  of  action  applicable  to  the  gov- 
ernment and  security  of  persons  and  property,  which  do  not  rest  for 
their  authority  upon  any  express  and  positive  declaration  of  the  will  of 
the  legislature. — i  Kent  Comm.  492. 

England. — The  common  law  of  England  consisted  of  certam  max- 
ims, principles,  and  forms  of  legal  proceedings  which,  from  long  usage, 
and  custom  had  become  interwoven  with  written  laws,  and  which  had 
for  a  long  time  been  administered  by  the  courts  as  the  law  of  the  land. 

While  the  common  law  was  and  is  an  unwritten  law  in  the  sense  of 
which  we  speak  of  a  legislative  statute,  the  "  common  sense  "  and  the 
maxims,  principles,  and  usages  which  went  to  make  up  the  common  law 
did  not  and  do  not  become  a  part  of  the  common  law  until  they  have 
received  continual  judicial  sanction,  and  they  thus,  through  the  printed 


decisions  of  the  courts,  have  become  written  laws,  althou|  the  term 
"  written  law  "  does  not  generally  apply  to  them. 

United  States. —  The  common  law  of  England  became,  1  lerally,  the 
common  law  of  the  original  colonies,  and  is  so  to-day  i  ihe  several 
States  except  as  it  has  been  changed  by  statute  or  by  th  decisions  of 
the  highest  courts  of  the  several  States.  Such  decisions  re  ly  constitute 
the  law  of  the  State  as  to  the  points  and  matters  decided  them. 

"  Among  the  first  acts  of  the  Continental  Congr  -s,  which  as- 
sembled in  Philadelphia  on  September  4,  1774,  was  thf  adoption  of  a 
declaration  of  rights,  affirming  '  that  the  respective  co  -nies  were  en- 
titled to  the  common  law  of  England,  and  the  benefit  f  such  English 
statutes  as  existed  at  the  time  of  their  colonization,  anc  which  they  had 
by  experience  respectively  found  to  be  applicable  to  the  ■  local  and  other 
circumstances. 


of  EnglaJ 
colony  of 


h  parts  of  the  common  law  of  England  and  of  the  statute  law 
and  Great  Britain,  and  of  the  acts  of  the  legislature  of  the 
ew  York,  as  together  did  form  the  law  of  the  said  colony  on 


the  19th  of  April,  1775,'  were  made  and  continued  the  law  of  the  State 
by  its  first  Constitution,    Const.  1777,  Sec.  35."    New  York. 


STATUTE  lAW. 


The  lav  created  from  time  to  time  by  acts  of  legislatures. 


Where  statute  law  conflicts  with  the  common  law,  the  latter  is,  dur- 
ing the  life  of  the  statute,  a  nullity. 


COURT. 


A  body  in  the  government  to  which  the  public  administration  of 
justice  is  delej  ited.  Coke,  Litt.  58  a.  Courts  are  the  machinery 
through  which    ws  are  interpreted  and  enforced. 


Each  of  the  several  States  enacts  its  own  laws. 
Each  of  the  several  States  has  its  own  courts.    The  decisions  of  the 
courts  of  one  State  are  absolutely  binding  only  in  that  State.  The  United 


States  courts  have  control  and  jurisdiction  in  each  of  the  States  in  mat- 
ters relating  only  to  the  general  government;  they  have  no  jurisdiction 
and  control  over  controversies  between  citizens  of  the  same  State;  but 
where  citizens  of  different  States  have  legal  controversies,  either  side  to 
the  litigation  may  generally  insist  that  the  case  be  tried  and  disposed  of 
in  the  United  States  courts, — and  this  whether  the  matter  in  controversy 
is  or  is  not  one  in  which  the  United  States  laws  are  in  question.  It  thus 
has  sometimes  happened  that  at  different  times  the  same  question  has 
been  decided  one  way  in  a  certain  State  in  a  litigation  in  its  State  courts, 
and  another  way  in  another  litigation  in  the  United  States  courts  sitting 
in  that  State.  Each  of  such  conflicting  decisions  is  decisive  and  con- 
clusive as  to  the  precise  litigation  then  and  there  before  such  court ;  but 
thereafter  the  decision  of  the  State  court  on  that  question  becomes  the 
judicial  law  of  that  State  on  that  question,  and  in  its  bearing  on  subse- 
quent lawsuits  in  that  State  it  is  the  higher  law,  and  overrules  the  deci- 
sion of  the  United  States  courts. 


The  Supreme  Court  of  the  United  States  has,  generall^^io  control 
or  jurisdiction  over  the  courts  of  the  several  States  except  iig.^^^^^  where 
the  violation  of  the  Constitution  of  the  United  States  is  in  i  ^iestion.  A 
State  court  may  wholly  ignore  a  decision  of  the  United  St.  s  Supreme 
Court  except  as  to  questions  involving  the  Constitution  or  '  statutes  of 
the  United  States. 

The  court  system  is  practically  the  same  in  all  of  the  Sy'^^s,  and  one 
brief  outline  will  give  a  general  idea  of  the  course  of  a  ^>'S"'t  in  any 
State.  J 

In  the  State  of  New  York,  if  one  person  have  a  grjy'  ance  against 
another,  and  he  desires  the  courts  to  pass  on  it,  he  states  grievance  to 
a  lawyer,  who  reduces  it  to  a  formal  written  "  complain  which  is  for- 
mally served  on  the  other  party  to  the  proposed  litigatif  If  the  latter 
party  chooses  to  contest  the  matter,  he  employs  a  lawy  ■  *vho  serves  on 
the  first  party  a  formal  written  "  answer  "  to  his  com'  The  mat- 

ter is  then  taken  up  at  a  "  Trial  Term  "  of  the  Supr      Court  of  the 


State,  and  '^th  parties  and  their  witnesses  are  heard  by  twelve  jurors 
and  one  jud^j.  A  decision  is  then  and  there  rendered.  If  either  party 
is  dissatisfie  ^wjth  such  decision  he  can  make  formal  appeal,  and  a  record 
of  the  trial  ^taken  to  the  "  Appellate  Division  "  of  the  Supreme  Court, 
where  the  C  e  is  argued  before  five  Supreme  Court  judges.  At  this 
argument  n<)  ,rors  are  present ;  no  witnesses  are  heard ;  no  new  evidence 
is  allowed.  1  .^e  five  judges  render  a  decision  saying  whether  the  deci- 
sion of  the  CO  rt  below  was  right  or  wrong. 

If  either  sii^  is  dissatisfied  with  this  last  decision,  he  can  appeal  to  the 
Court  of  Appe^s  (a  court  of  last  resort),  where  the  case  is  finally  passed 


on  by  seven  judges.  No  new  evidence  is  taken  nor  any  witnesses  are 
heard  in  this  court ;  the  case  is  there  argued  and  decided  on  a  printed 
record  of  what  took  place  in  the  lower  courts. 

If  no  answer  is  made  to  the  first  written  complaint,  judgment  is 
entered  for  the  amount  of  money  claimed  to  be  due,  and  the  sheriff  seizes 
on  the  property  of  the  defaulting  debtor  and  sells  it  to  satisfy  the  judg- 
ment. And  if  from  any  of  the  decisions  made  by  the  different  branches 
of  the  court  during  the  litigation  no  appeal  is  then  taken,  a  judgment  is 
entered,  as  above,  and  the  same  procedure  by  the  sheriff  follows. 

This  general  form  of  procedure  applies  tQ  the  United  States  courts. 


CHECK-USUAL  FORM. 


lis  check  is  drawn  payabln  to  the  order  of  Wm. 
Carpenter,  and  thus  bears  evidence  that  Car- 
er is  the  owner  of  it;  and  uniil  he  writes  his 
,e  on  the  back  thereof,  it  is  not  negotiable, 
any  person  should  advance  the  money  on  it 
lOUt  the  indorsement  of  Carpenter,  or  if  the 
k  should  pay  it  without  his  indorsement,  il 
Id  be  at  their  peril. 


B. 


PROMISSORY  NOTE-USUAL  FORM. 


'his  note  Is  drawn  payable  to  the  order  of  Wra. 

Carpenter,  and  thus  bears  evidence  that  he  is 
owner  of  it ;  and  until  he  writes  his  name  on 
back  thereof,  it  is  not  negotiable,  and  a  pur- 

iser  would  take  it  at  bis  peril. 


^A7^.aX  ^^^^^ 


DRAFT-USUAL  FORM. 


he  term  draft  is  indiscriminaiely  applied  to 
cks,  bills  of  exchange,  or  any  order  for  Ihe  pay- 
of  money,—  and  such  application  of  the  term 
ol  wholly  erroneous  ;  courts  recognize  the  fact 
word  has  no  precise  commercial  paper 
n.    If  the  drawee  of  this  draft  was  a  bank, 
ument  would  be  strictly  a  check, —  if  pay- 
demand.    The  term  applies   usually  tc 
:nts  for  the  collection  of  money  due  or  pas. 
ot  to  an  instrument  made  to  discouoc  oi 


INDORSER:  INDORSEE  i 
'indorsement  in  FULL:' 
'special  INDORSEMENT:" 

NOTICE  OF  OWNERSHIP 


 Js[iN_TlL_\\^RD  Bank 


#220£^  .  ^^^^^^^^^^^^^ 


LIABILITY  OF  PARTIES  TO  A  CHECK: 
VHEN  IT  SHOULD  Br  dreseNTED  FOR 
P4YMENT. 


 Ninth  Warti  Rank 


(efUHKEROHHAKUJ 


G. 


CERTIFIED  CHECK: 
UIABILITV  OF  BANK  I 
■ABILITY  OP  MAKER  AND  INOORSERS 


 Ninth  Waro  Rank  


MLL  OF  EXCHANGE:  DRAFT) 
LIABILITY  OF  PARTIES. 


ORM  OF  DRAFT  WHERE  THE  CREDITOR 
WISHES  TO  DRAW  ON  THE  DEBTOR. 


The  payee  might  be  the  bank  at  which  the  de- 
)sitor  keeps  his  account,  or  any  express  company 
ith  whom  the  draft  is  left  for  collection,  or  it 
ight  be  the  bank  where  tbe  debtor  lives  and  to 
hom  the  creditor  has  enclosed  the  draft  by  mail, 

ih  the  request  that  such  bank  collect  the  draft 

d  remit  proceeds. 


■Hwmni 


BLANK  INDORSEMENT' 
HOW  CHANCED  TO  SPECIAL 
INDORSEMENT 


SPECIAL  INDORSEMENT 
INDORSEMENT  IN  FUU. 
ORDER  OP  LIABILITV. 


prkviW  A^K-i^A^  y<^^:4^<^^i;yL.S—^/U^^mi:de'^^^^ 


— 29 


ilil 


III 

Villi 

IK 


m 


liwii 


iii  iiii!  11 


lilP 


ii 


NOTE  PAYABLE  TO  BEARER: 
INDORSEMENT  OF  SUCH  NOTE. 
SPECIAL  INDORSEMENT: 
RESTRICTIVE  INDORSEMENT 


RESTRICTIVE  INDORSEMENT: 
lORSEMENT   "WITHOUT  RECOURSE. 


00 


I " » 


,°  ^  • 


2 :  s  ^  ^  •& 


!»<  ■rf 


^  ^  k  w 


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;  m  5  S 

'•  S  b=  ' 

i  ■£  e  8 


E  i 


N. 


nmCCULAII  INOORSEMBNT. 


INDORSEMENT  BY  CUARAim 
GUARANTY 


-J±.%. 


CORPORATE  SIGNATURE  AND 
INDORSEMENT. 


00, 


SIGNATURE  BY  AN  ACENT. 


D0R8EMENT  "WITHOUT  RECOV^aE 


INDORSEMENT  "PROTEST  Wxfvtt 


00 


.^.f^v^i^x  (3/i^^</.  QcmAV.  G^Jr.^. 


(S^^^:^  ^/o-cA/gA/  iSC^^-^-^-^ 


1. 


re  PAYABLE  TO  C.-NOT  TO  "C.  Oh 
RDER"  NOR  TO   "c  OR  BEARER  ' 
INDORSEMENT  OF  SUCH  NOTE. 


00 


£yb-oaiH:w/.>  ^i2.,m^.  ^muui'ny  ^1  -  y,P^^ 


%;uvi^.  <^?^aA.  ^^'^/ 


u. 

The  bolder  of  this  note  can  co  lect  the  full  amouni. 
,500,  from  any  one  of  the  three  signers.    As  be- 
een  themselves  each  one  is  liatile  for  one-third  — 
there  IS  a  special  coniracL  to  the  contrary ; 
d  if  one  has  paid  the  full  amount  he  can  compel 
ch  of  the  others  to  contribute  one-third,  and  if  one> 
two  is  insolveni  the  solvent  one  must  con- 
ibute  one  half     Ttie  rule  would  not  be  changed  if 
imise  lead  "I"  promise,   &c..   instead  of 
jromise,&c.  This  note  as  drawn  is  a  "  joint" 
i  distinguished  from  a  "  several"  note.  Tht 
incipal  distinction  between  such  notes  is  that  in 
inging  an  action  on  a  joint  note  all  of  the  makers 
to  be  joined  in  one  action,  while  on  stveral 
any  of  the  makers  may  be  sued  alone.    If  the 
lise  in  this  note  read  "  I "  instead  of  "we "  the 
would  be  a  "several"  note  although  signed  by 
or  more  parties.    If  the  promise  read  "we  01 
her  of  us,"  the  note  would  he  both  joint  and 
13  N.  H.  385;  100  Mich.  339. 


MM 


00 


ILLUSTRATED  IRREGULAR  PAPER 

IN  CONNECTION  WITH 

THE  UNIFORM  NEGOTIABLE  INSTRUMENTS  LAW 


99 


Where  a  statute  is  intended  to  embody  in  a  code  a  particular  branch  of  the  law,  and  has  specifically  dealt  with  any  point,  the 
law  on  that  point  should  be  ascertained  by  interpreting  the  language  used,  instead  of  doing  as  before  the  statute  was  passed  — 
roaming  over  a  vast  number  of  authorities  in  order  to  discover  what  the  law  is  and  extracting  it  by  a  minute,  critical  examina- 
tion of  prior  decisions.    Lord  Bramwill,  in  Bank  vs.  Vogleano,  App.  ^as.  107,  144. 


TITLE  I. 


NEGOTIABLE  INSTRUMENTS  IN  GENERAL. 


ARTICLE  I. 
FORM  AND  INTERPRETATION. 


Sec.  I.  Form  of  Negotiable  Instnunent.  An  instrument  to  be  nego- 
tiable must  conform  to  the  following  requirements : 

1.  It  must  be  in  writing  and  signed  by  the  maker  or  drawer; 

2.  Must  contain  an  unconditional  promise  or  order  to  pay  a  sum 
certain  in  money; 

3.  Must  be  payable  on  demand,  or  at  a  fixed  or  determinable  future 
time; 

4.  Must  be  payable  to  order  or  bearer ;  and 

5.  Where  the  instrument  is  addressed  to  a  drawer,  he  must  be  named 
or  otherwise  indicated  therein  with  reasonable  certainty. 

Cf.  sees.  2,  3,  4,  7  and  9. 


NO.  1. 


New  York,  N.Y. 

February  3rd,  19Q5j 


As  por  verbal  agreement  made  between  Mr,  John  Euitoh.Jr, 
NEGOTIABILITY.  ^  Vamey .  we  hereby  agree  to  pay  you  the  sura  of  $1,039.19 


McMASTER'S  COMMERCIAL  CASES, 
1907.   PAGE  204A, 
117APP.  DIV.  (N.  Y.  )  572. 


ninety  days  from  date;  this  amount  to  be  paid  out  of  our  profits  on 
the  ?  East  40th  Street  Job,  s:^L^e<r  *^  ^^^^^""^^ 


0  w 


^  P  5  5 


<  > 


m  »•  Q 


XI   c/)    CI,  -o  .12 


NO.  2 


PARTNERSHIP:  FIRM  NAME  i 
PARTNERSHIP  NOTE. 


tVhere  one  partner  seeks  (o  bind  the  firm  by  a 
le.  the  precise  firm  name  must  be  used  m  the 


leSA.  VOL.  1,  MCMASTER'S  REVERSED  CASES: 
61  S.  W.  REP.  606. 


:  I  : 


Sec.  2.  Certainty  as  to  Sum;  What  Constitutes.  Tlie  sum  payable 
is  a  sum  certain  witiiin  tlie  meaning  of  ttie  Act,  altliougli  it  is  to  be  paid: 

1.  With  interest;  or 

2.  By  stated  instalments ;  or 

3.  By  stated  instalments  with  a  provision  that  upon  default  in  pay- 
ment of  any  instalment  or  of  interest,  the  whole  shall  become  due;  or 

4.  With  exchange,  whether  at  a  fixed  rate  or  at  the  current  rate;  or 

5.  With  cost  of  collection  for  an  attorney's  fee,  in  case  payment 
shall  not  be  made  at  maturity. 

Nebraska  and  South  Dakota  construe  clause  5.  Clause  3  is  slightly 
varied  in  the  law  of  Idaho,  Iowa,  Minnesota,  North  Carolina  and 
Wyoming.  , 


NO.  3. 


WITH  EXCHANGE. 


a1  urser  not  liable  when  the  words  "  in  New  YorI< 
aiige  *'  are  used. 


McMASTER  S  COMMERCIAL  CASES. 
1906.  2A. 
104  N.  W.  369. 


(/  ■ 

<4xc/^  eccc^oLn^^  a-rKiZ  CG^/ec/c^^  e^a^^^d  a/  •Jj^t/}<4Z  ^^ctZe  ^^an^  t^^/tit,  x^^i^cryn.  w</A, 
cn/e^€4/  ^^tn   k/^o/.    a/  //te  -xaA:  S  /tcie    annum,  tcn/c/ /ttztcZ.  _ 


Sec.  3.  When  Promise  is  Unconditional.  An  unqualified  order  or 
promise  to  pay  is  unconditional  within  the  meaning  of  this  Act,  though 
coupled  with  : 

1.  An  indication  of  a  particular  fund,  out  of  which  reimbursement  is 
to  be  made,  or  a  particular  account  to  be  debited  with  the  amount;  or 

2.  A  statement  of  the  transaction,  which  gives  rise  to  the  instrument. 
But  an  order  or  promise  to  pay  out  of  a  particular  fund  is  not  uncon- 
ditional. 


No.  6. 

IRAFT  ON  SPECIAL  FUND,-" NEITHEK 
ACCEPTORS  OR  INDORSERS 
LIABLE. 


HASTCR'S  COMMERCIAL  DIUST 
PAGE  4B4A; 
60  N.  W.  REP  440. 


-U9- 


 ~Fci\f  to 


■fh    ctya^-ra^       Gr.  71  Wa <f  OjacjitH  anil  ES  EcKirSOTL 


<jihic 2aJii—6oo . an<.  ait  my  cauTraet 
To    iStcksZaUj  FgVitexrSS ' 


JJoiiars 


^1  Aa^Sz^i^ 


<«  2 

u  ^ 

-8  ^ 

CO  tfl 


*M5  - 

a  ni 
B  -o  -S 


Q)  3  fl) 

p  o  o  -  o 

a  c  o  <^  'oo  c 

C  ts  "   c  ^ 

t.  -o  u  3'  X  o 


NO.  7. 
DRAFT  ON  SPECIAL  FUND 

TbiB  check  was  held  to  be  non*oegoUabIe. 


ITIA,  VOL.  1,  HeMASTCR'S  REVERSED  CAUSi 
4a  AT.  REP  4SB. 


What-  mayOeOCue  on  m.y  dCefosil  6oo  H  y^o  laSt 


• 

3 

m 
♦J 

m 

c 

a 
c 

oi 
9 

u 

o 
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E-i 

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aid 

rt 
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a 

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the 

and 

-rt 
♦» 

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■oo 

oour 

o 

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c 

Hi 

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a 

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u 

>> 

o 

(4 

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di 

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(1) 

a 

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idera- 

1 

w 

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0. 

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XI 

c 

1 

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been 

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*J 

3 

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der 

0 

m 

o 

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3 

No.  8. 


□  RAFT  ON  SPECIAL  FUND: 
NON-NECOTIABLE  INSTRUMENT. 


^cMASTER'S  COMMERCIAL  DIGEST. 
PAGE  42A, 
3Z  N.  Y.  239. 


dJ/Soo 


Ten.  cLgyjS  a^ter  tXa-te.  


SteantCi-  Co2orz  . 


•2  g  5  *      J2  2 


03 

B 


3  c 


C  I, 
O  -0 


3    O  TJ 
♦J  3 


COS 

Q,    C  «J 

o  a>  b 
o  ta  e 


to  D 

a  o 


B  O 
o  ^ 
H 
>> 

m  o 


0  O  z 
0-  M 


n 


:  a 

I  o  o  ' 

1 '  ^ ' 


y         rt  ^ 


1  o  d  "  c  u  h 
^  ^  1       =  g 


Sec.  Determinable  Future  Time ;  What  Constitutes.  An  instrument 
is  payable  at  a  determinable  future  time,  within  the  meaning  of  this  Act, 
which  is  expressed  to  be  payable ; 

1.  At  a  fixed  period  after  date  or  sight;  or 

2.  On  or  before  a  fixed  or  determinable  future  time  specified  therein; 

or 

3.  On  or  at  a  fixed  period  after  the  occurrence  of  a  specified  event, 
which  is  certain  to  happen,  though  the  time  of  happening  be  uncertain. 

An  instrument  payable  upon  a  contingency  is  not  negotiable,  and  the 
happening  of  the  event  does  not  cure  the  defect. 
See  Wisconsin,  Laws  1906.  ch.  78,  sec.  1678. 


No.  9. 

April  3,  1902 

FUTURE  TIME: 

on  the  death  of  Eliza  M.  Smith,  I  promise  to  pay  t 

EVENT  THAT  DETERMINES.  ,  , 

her  estate  the  svua  of  five  hundred  aollars* 


MCMASTER  S  COMMERCIAL  CASES. 
1914.  PAGE  7A. 
156  APP.  DIV.   (N.  Y.  )  807. 


«  OJ 


1  < 


No.  10. 


$900.00 


No.  0187- 
Cam'brlclge,  Idaho,  May  8,  190}. 


NON-NEGOTIABLE  NOTE. 


ank  holds  note  subject  to  all  the  equities,  counter- 
ms  and  defenses  that  existed  between  Boland,  the 
:er,  and  the  Cattle  Co.,  the  payee. 


MCMASTER'S  COMMERCIAL  CASES. 
I908,  PAGE  221A. 
93  PAC.  SOS. 


Six  moathB  after  date,  for  value  received,  I,  we,  or  either  of  us  Joint- 
ly and  severally  promise  to  pay  to  the  order  of  Unita  Hereford  Cattle  Com- 
pany the  sum  of  nine  hundred  dollars,  with  interest  at  the  rate  of  ten 
per  centu.n  per  annum  from  date  until  paid. 

Payable  at  the  office  of  the  Peoples'  Bank,  Saluliria,  Idaho. 

Should  this  note  be  collected  by  suit,  ten  per  cent,  shall  be 
allowed  holder  as  attorney  fee.      The  sureties,  guarantors  and  indorsers 
of  this  note  severally  waive  presentation  for  payment,  protest  and  notice 
of  protest.      No  extension  of  time  of  payment  with  or  without  our  knowl- 
edge by  the  receipt  of  interest  or  otherwise  shall  release  us  or  either 
of  us  from  the  obligation  of  payment.  ^^^Z 


Sec.  5.  Additional  Provisions  not  Affecting  Negotiability.  An  instru- 
ment which  contains  an  order  or  promise  to  do  any  act  in  addition  to  the 
payment  of  money  is  not  negotiable.  But  the  negotiable  character  of  an 
instrument  otherwise  negotiable  is  not  affected  by  a  provision  which : 

1.  Authorizes  the  sale  of  collateral  securities  in  case  the  instrument 
be  not  paid  at  maturity;  or 

2.  Authorizes  a  confession  of  judgment  if  the  instrument  be  not 
paid  at  maturity;  or 

3.  Waives  the  benefit  of  any  law  intended  for  the  advantage  or 
protection  of  the  obligor;  or 

4.  Gives  the  holder  an  election  to  require  something  to  be  done  in 
lieu  of  payment  of  money. 

But  nothing  in  this  section  shall  validate  any  provision  or  stipula- 
tion otherwise  illegal. 

Sec.  6.  Omissions;  Seal;  Particular  Money.  The  validity  and  nego- 
tiable character  of  an  instrument  are  not  affected  by  the  fact  that: 

I.  It  is  not  dated ;  or 


2.  Does  not  specify  the  value  given,  or  that  any  value  has  been 
given  therefor;  or 

3.  Does  not  specify  the  place  where  it  is  drawn  or  the  place  where 
it  is  payable;  or 

4.  Bears  a  seal ;  or 

5.  Designates  a  particular  kind  of  current  money  in  which  payment 
is  to  be  made. 

But  nothing  in  this  section  shall  alter  or  repeal  any  statute  requiring 
in  certain  cases  the  nature  of  the  consideration  to  be  stated  in  the 
instrument. 

Clause  I,  if  undated,  cf.  sec.  17.  CI.  3,  for  place  of  presentment,  cf. 
sec.  73  and  No.  1 1,  infra. 

See  Illinois  Rev.  Stats.,  1909,  p.  1532,  sec.  6.  Kentucky  Stats.  1909, 
art.  9,  sec.  1903.  North  Carolina  Laws  1908,  ch.  54,  sec.  2156.  Pell. 
South  Dakota  Laws  1913,  ch.  273,  sec.  6.  Wisconsin  Laws  1906,  ch.  78, 
sec.  1670. 


to 

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132 


Sec.  7.  When  Payable  on  Demand.  An  instrument  is  payable  on 
demand : 

1.  Where  it  is  expressed  to  be  payable  on  demand,  or  at  sight,  or  on 
presentation ;  or 

2.  In  which  no  time  for  payment  is  expressed. 

Where  an  instrument  is  issued,  accepted  or  indorsed  when  overdue, 
it  is,  as  regards  the  person  so  issuing,  accepting  or  mdorsmg  it,  payable 
on  demand. 

Sec  8  When  Payable  to  Order.  The  instrument  is  payable  to  order 
where  it  is  drawn  payable  to  the  order  of  a  specified  person  or  to  hira  or 
his  order.   It  may  be  drawn  payable  to  the  order  of; 

1.  A  payee  who  is  not  maker,  drawer  or  drawee ;  or 

2.  The  drawer  or  maker ;  or 

3.  The  drawee;  or 

4.  Two  or  more  payees  jointly;  or 

5.  One  or  some  of  several  payees ;  or 

6  The  holder  of  an  office  for  the  time  being. 

Where  the  instrument  is  payable  to  order  the  payee  must  be  named 
or  otherwise  indicated  therein  with  reasonable  certainty. 


Sec.  9.  When  Payable  to  Bearer.  The  instrument  is  payable  to 
bearer ; 

1.  When  it  is  expressed  to  be  so  payable;  or 

2.  When  it  is  payable  to  a  person  named  therein  or  bearer ;  or 

3.  When  it  is  payable  to  the  order  of  a  fictitious  or  non-e.xisting 
person,  and  such  fact  was  known  to  the  person  making  it  as  payable ;  or 

4.  When  the  name  of  the  payee  does  not  purport  to  be  the  name  o€ 
any  person ;  or 

5.  When  the  only  or  last  indorsement  is  an  indorsement  in  blank. 
Clause  4,  cf.  sec.  34;  cl.  5,  cf.  sec.  30;  cl.  i,  sec.  40. 

For  text  changes,  see  Illinois  Rev.  Stats.,  1909,  page  1532,  sec.  9. 

Sec.  10.  Terms  When  Sufficient.  The  instrument  need  not  follow 
the  language  of  this  Act,  but  any  terms  are  sufficient  which  clearly 
indicate  an  intention  to  conform  to  the  requirements  hereof.    Cf.  sec.  40. 

For  text  changes  see  Alabama  Civ.  Code  No.  107,  sec.  496S.  Idaho 
Civ.  Code  1908,  Title  XIII,  sec.  3468.  Illinois  Rev.  Stats.,  1909,  page 
1534,  sec.  10.  Iowa  Code  Supp.  1902,  ch.  3a,  Title  XV,  sec.  3070.  West 
Virginia  Code  Supp.  1917,  ch.  99,  sec.  3456-a-io.  Wisconsin  Supp.  Laws 
1906  ch.  78,  sec.  1686.    Wyoming  Comp.  Stats.  1910,  ch.  210,  sec.  3169. 


Sec.  ir.  Date,  Presumption  as  to.  Where  the  instrument  or  an 
acceptance  or  any  indorsement  thereon  is  dated,  such  date  is  deemed 
prima  facie  to  be  the  true  date  of  the  making,  drawing,  acceptance  or 
indorsement,  as  the  case  may  be. 

Sec.  12.  Ante-dated  and  Post-dated.    The  instrument  is  not  invalid 


for  the  reason  only  that  it  is  ante-dated  or  post-dated,  provided  this  is 
not  done  for  an  illegal  or  fraudulent  purpose.  The  person  to  whom  an 
instrument  so  dated  is  delivered  acquires  the  title  thereto  as  of  the  date 
of  delivery. 


No.  12. 


POST-DATED  CHECK: 


PAST  DUE  PAPER:  INDORSER. 


McMASTER'S  COMMEBCIAL  CASES. 
I906,  PAGE  146A. 
74  N.  E.  926. 


.y^>^^  Salem.  Mass.  ^^^^  a-  ^f/ycC 

National  Exchange  Bank  ofSalem. 


Sec.  13.  When  Date  May  be  Inserted.  Where  an  instrument 
expressed  to  be  payable  at  a  fixed  period  after  date,  is  issued  undated,  or 
where  the  acceptance  of  an  instrument  payable  at  a  fixed  period  after 
sight  is  undated,  any  holder  may  insert  therein  the  true  date  of  issue  or 
acceptance,  and  the  instrument  shall  be  payable  accordingly.  The  inser- 
tion of  a  wrong  date  does  not  avoid  the  instrument  in  the  hands  of  a 
subsequent  holder  in  due  course;  but  as  to  him  the  date  so  inserted  is 
to  be  regarded  as  the  true  date. 

Sec.  14.  Blanks;  When  May  Be  Filled.  Where  the  instrument  is 
wanting  in  any  material  particular,  the  person  in  possession  thereof  has 
a  prima  facie  authority  to  complete  it  by  filling  up  the  blanks  therein. 
And  a  signature  on  a  blank  paper  delivered  by  the  person  making  the 
signature  in  order  that  the  paper  may  be  converted  into  a  negotiable 


instrument  operates  as  a  prima  facie  authority  to  fill  it  up  as  such  for 
any  amount.  In  order,  however,  that  any  such  instrument  when  com- 
pleted, may  be  enforced  against  any  person  who  became  a  party  thereto 
prior  to  its  completion,  it  must  be  filled  up  strictly  in  accordance  with 
the  authority  given  and  within  a  reasonable  time.  But  if  any  such 
instrument  after  completion,  is  negotiated  to  a  holder  in  due  course,  it 
is  valid  and  effectual  for  all  purposes  in  his  hands,  and  he  may  enforce 
it  as  if  it  had  been  filled  up  strictly  in  accordance  with  the  authority 
given  and  within  a  reasonable  time.    Cf.  sec.  13. 

Variants:  Illinois  Rev.  Stats.  1909,  sec.  14.  Kentucky  Stats.  1909, 
art.  9,  sec.  191 1.  South  Dakota  Ch.  279,  sec.  14.  Wisconsin  Laws  1906, 
ch.  78,  sec.  1689 


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Sec.  15.  Incomplete  Instrument  not  Delivered.  Where  an  incom- 
plete instrument  has  not  been  delivered  it  will  not,  if  completed  and 
negotiated,  without  authority,  be  a  valid  contract  in  the  hands  of  any 
holder,  as  against  any  person  whose  signature  was  placed  thereon  before 
delivery.    Cf.  sec.  30  and  sec.  16. 

Sec.  16.  Delivery;  When  Effectual;  When  Presumed.  Every  con- 
tract on  a  negotiable  instrument  is  incomplete  and  revocable  until  deliv- 
ery of  the  instrument  for  the  purpose  of  giving  effect  thereto.  As 
between  immediate  parties,  and  as  regards  a  remote  party  other  than  a 
holder  in  due  course,  the  delivery,  in  order  to  be  effectual,  must  be  made 
either  by  or  under  the  authority  of  the  party  making,  drawing,  accepting 


or  indorsing,  as  the  case  may  be;  and  in  such  case  the  delivery  may  be 
shown  to  have  been  conditional,  or  for  a  special  purpose  only,  and  not 
for  the  purpose  of  transferring  the  property  in  the  instrument.  But 
where  the  instrument  is  in  the  hands  of  a  holder  in  due  course,  a  valid 
delivery  thereof  by  all  parties  prior  to  him  so  as  to  make  them  liable  to 
him  is  conclusively  presumed.  And  where  the  instrument  is  no  longer 
in  the  possession  of  a  party  whose  signature  appears  thereon,  a  valid  and 
intentional  delivery  by  him  is  presumed  until-  the  contrary  is  proved. 

For  text  changes,  see  Kansas  Laws  1909,  ch.  84,  sec.  16.  North 
Carolina  Laws  1908,  ch.  54,  Pell.  South  Dakota  Laws  1913,  ch.  279, 
sec.  16. 


/ 


ate—    — =^^—^^^— 


Sec.  17.  Construction  Where  Instrument  is  Ambiguous.  Where 
the  language  of  the  instrument  is  ambiguous,  or  there  are  omissions 
therein,  the  following  rules  of  construction  apply: 

1.  Where  the  sum  payable  is  expressed  in  words  and  also  in  figures 
and  there  is  a  discrepancy  between  the  two,  the  sum  denoted  by  the 
words  is  the  sum  payable;  but  if  the  words  are  ambiguous  or  uncertain, 
reference  may  be  had  to  the  figures  to  fix  the  amount ; 

2.  Where  the  instrument  provides  for  the  payment  of  interest,  with- 
out specifying  the  date  from  which  interest  is  to  run,  the  interest  runs 
from  the  date  of  the  instrument,  and  if  the  instrument  is  undated,  from 
the  issue  thereof; 

3.  Where  the  instrument  is  not  dated,  it  will  be  considered  to  be 
dated  as  of  the  time  it  was  issued ; 

4.  Where  there  is  a  conflict  between  the  written  and  printed  pro- 
visions of  the  instrument,  the  written  provisions  prevail; 

5.  Where  the  instrument  is  so  ambiguous  that  there  is  doubt 


whether  it  is  a  bill  or  note,  the  holder  may  treat  it  as  either  at  his 
election ; 

6.  Where  a  signature  is  so  placed  upon  an  instrument  that  it  is  not 
clear  in  what  capacity  the  person  making  the  same  intended  to  sign,  he 
is  to  be  deemed  an  indorser; 

7.  Where  an  instrument  containing  the  words  "  I  promise  to  pay  " 
is  signed  by  two  or  more  persons,  they  are  deemed  to  be  jointly  and 
severally  liable  thereon. 

Wisconsin  Laws  igo6,  ch.  78,  sec.  1692. 

Sec.  18.  Liability  of  Person  Signing  in  Trade  or  Assumed  Name. 

No  person  is  liable  on  the  instrument  whose  signature  does  not  appear 
thereon,  except  as  herein  otherwise  expressly  provided.  But  one  who 
signs  in  a  trade  or  assumed  name  will  be  liable  to  the  same'extent  as 
if  he  had  signed  in  his  own  name. 


NO.  15. 


ASSUMED  NAMES. 


MCMASTER'S  COMMERCIAL  CASES, 
1911.  PAGE  50A. 
77  ATL.  REP.  869. 


Sec.  19.  Signature  by  Agent;  Authority;  How  Shown.  The  sig- 
nature of  any  party  may  be  made  by  a  duly  authorized  agent.  No  par- 
ticular form  of  appointment  is  necessary  for  this  purpose ;  and  the  author- 
ity of  the  agent  may  be  established  as  in  other  cases  of  agency. 


See  Kentucky  Laws  1909,  art.  9,  sec.  1915.  South  Dakota  Laws 
1913,  ch.  279,  sec.  19. 


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CORPORATION!  Accommodation 

IK'DORSER. 

is  held  here  that  a  president  of  a  corporation, 
I  bad  authority  to  make  and  indorse  paper. 
Id  iioi  bind  the  corporation  by  an  accommo- 
ioa  indorsement,  even  if  a  bonus  was  received 
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le  directors  would  probably  be  powerless  to 
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MeMASTER-S  COMMERCIAL  DIQEST, 

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Sec.  20.  Liability  of  Person  Signing  as  Agent.  Where  the  instru- 
ment contains  or  a  person  adds  to  his  signature  words  indicating  that 
he  signs  for  or  on  behalf  of  a  principal,  or  in  a  representative  capacity, 
he  is  not  liable  on  the  instrument  if  he  was  duly  authorized;  but  the 


mere  addition  of  words  describing  him  as  an  agent,  or  as  filling  a  rep- 
resentative character,  without  disclosing  his  principal,  "does  not  exempt 
him  from  personal  liability. 


NO.  20. 

CORPORATION  NOTE. 

)  fix  liability  the  corporation  must  promise  and 
its  name  and  seal  as  signature. 

McMASTER'S  COMMERCIAL  CASES. 
1906.  PAGE  40A, 
SO  PAC.  811. 

/K         <7                  German-American  Investment  Company,  Inc. 

 "  ^^^yU^ -..^^Y-^t.^-'i^^^-e^^l^   '•  *    ^Jn//^/^^ 

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.  —  ^  — / — 

ISl 

NO.  21. 
CORPORATE  SIGNATURE 


r  affixing  improper  siffnature  lo  acceptance  tb 
I  became  liable  for  debt  of  principal 


>3  ^  State  51.  Boston. .     Aifoz^r  mo  7i7as.       ^'-'^^  ^^'f^ 


JJoUars. 


00 


NO.  22. 


CORPORATE  SIGNATURE. 


ertain  signature  intended  to  be  official,  held  to 
individual. 


McMASTER  S  COMMERCIAL  DIGEST. 
PAGE  60A. 
162  ILL.  241. 


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CORPORATE  SIGNATURE. 


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NO.  24. 

CORPORATE  NOTE :  FORM  OF 
SIGNATURE. 


 ote  was  held  to  be  tlie  individual  note  ot 

llace  and  Smith,  although  the  owner  had  de- 
1  on  a  note  by  the  same  parties  —  with  the 
signatures  — as  the  note  of  the  Wallace  Iron 

irts. 


V) 


//(id  - 


 ^fcvcn  J/77 77 ctrccX.  ■  - 


NO.  25 


CORPORATE  NOTE :  FORM  OF 
SIGNATURE. 


Tbis  noie  was  held  to  be  the  individcal  note  ot 
jigners. 


00 


o^Jf.'S:  Poy/vers .          SindfanctreO.   Uollais 


TtZtsiecS  . 


NO.  26. 


EXECUTORS :   ADMINISTRATORS : 
TRUSTEES : 
ICK  OF  POWER  TO  BIND  THEIR  TRUST 
ESTATES  BY  COMMERCIAL  PAPER 
OR  ANY  NEW  CONTRACTS. 


MCMASTER'S  COMMERCIAL  DIGEST, 
PAGES  63  A  ;   1  62  A  ; 
IND.  269;  101  N.  Y.  SSA]  30  SO.  E.  REP.  331  J 
IMINN.  42T:    132  MASS.  286:  66  ALA.  607  « 


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NO.  28. 


GUARDIAN:  EXECUTOII. 


[etc  made  by  guardian  under  illegal  order  oi 
rt,  held  to  bind  the  guardian  individually, 
lough  made  in  good  faith  and  under  proper 
signature. 


taSA,  VOL.  1,  MCMASTCR'S  REV 


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Sec.  21.  Signature  by  Procuration;  Effect  of.  A  signature  by  "  pro- 
curation "  operates  as  notice  that  tlie  agent  has  but  a  limited  authority 
to  sign,  and  the  principal  is  bound  only  in  case  the  agent  in  so  signing 
acted  within  the  actual  limits  of  his  authority. 

Sec.  22.  Effect  of  Indorsement  by  Infant  or  Corporation.  The  in- 
dorsement or  assignment  of  the  instrument  by  a  corporation  or  by  an 
infant  passes  the  property  therein,  notwithstanding  that  from  want  of 
capacity  the  corporation  or  infant  may  incur  no  liability  thereon. 

For  text  change,  see  South  Dakota  Laws  191 3,  ch.  279,  sec.  22. 


Sec.  23.  Forged  Signature;  Effect  of.  Where  a  signature  is  forged 
or  made  without  authority  of  person  whose  signature  it  purports  to  be, 
it  is  wholly  inoperative,  and  no  right  to  retain  the  instrument,  or  to 
give  a  discharge  therefor,  or  to  enforce  payment  thereof  against  any 
party  thereto,  can  be  acquired  through  or  under  such  signature,  unless 
the  party,  against  whom  it  is  sought  to  enforce  such  right,  is  precluded 
from  setting  up  the  forgery  or  want  of  authority. 

For  text  variations,  see  Illinois  Rev.  Stats.  1909,  page  1536;  South 
Dakota  Laws  1913,  ch.  279. 


NO.  30. 

FORGED  INDORSEMENT: 
TWO  PERSONS  SAME  NAME. 


K  middle  initial  letter,  in  law,  is  not  recognized  as 
rt  of  a  person's  name. 


McMASTER'S  COMMERCIAL  DIGEST, 
PAGE  290A. 

51  N.  E.  REP.  602.  » .  -^O 


?p^/^/^<?^i:^i;^;SiJ:4UtTU^  c  J^.^cixii  

Qncyji  ndCrtTi-Z  7h  irf  y  7??  r<re  V-  '^^/f..  ^  ^o^ms^ 


NO.  31. 


INDORSEMENT:  WARRANTY  ^ 
FORGERY. 


;e  where  indorsement  was  not  warrantj 
previous  indorsement. 


U,  VOL.  1,  McMASTCR'8  REVERSED  CASES 


ISC 


NO.  32. 

PARTNEHSH'" 


ijhi  ol  partners  in  non-trajing  partnerships  to 
ihe  firm  by  promissory  note. 


CMASTER  S  COMMERCIAL  DIGEST. 
PAGE  252A, 


Th cLcHtri-Cit isoTi.  ."Uta-i  Esittie.  tTusurAtiee,, 


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NO.  33. 

OWER  OF  ATTORNEY:  SIGNATURE. 


iia  power  of  attorney  to  carry  on  business 
1  authorize  the  execution  of  notes. 


«A,  VOL.  1,  McMilSTCR-S  RCVCRSCD  CASEa 


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NO.  36. 


POWER  OF  ATTORNEY! 
ACCEPTANCE. 


Power  of  attorney  to  siga  checks  did  not  gin 
oirer  to  accept  drafts. 


0.00 


iimiiriiiiiiiiiiiiiiniii 


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Lo    E  2  s  3  S  S  .;i  vo  2 


NO.  37. 

lOWER  OF  ATTORNEY:  SICNATUREi 
iBILITY  OF  PAYEE  OF  CHECKS  WHICH 
BEARS  LECAL  INDORSEMENT 
OF  PAYEE. 


103A,  VOU  2,  MCMASTER'S  REVTRBCD  CASES. 


y^t%rr>f  \/>/^^f*-rr, ^r.>,rxnnl  pani/ 
C.Af  Fa^E  


ARTICLE  II. 

CONSIDERATION  OF  NEGOTIABLE  INSTRUMENTS. 


Sec.  24.  Presumption  of  Consideration.  Every  negotiable  instru- 
ment is  deemed  prima  facie  to  have  been  issued  for  a  valuable  consid- 
eration; and  every  person  whose  signature  appears  thereon  to  have 
become  a  party  thereto  for  value. 

Sec.  25.  Consideration;  What  Constitutes.   Value  is  any  considera- 


tion sufficient  to  support  a  simple  contract.  An  antecedent  or  pre-exist- 
ing debt  constitutes  value;  and  is  deemed  such  whether  the  instrument 
is  payable  on  demand  or  at  a  future  time. 

For  text  changes,  see  Illinois  Rev.  Stats.  1909,  sec.  25,  page  1538; 
Wisconsin  Laws  1906,  ch.  78,  sec.  1676. 


NO.  38. 


CONSIDERATION. 


holder  of  a  note  as  collateral  security  is  a 
er  for  value  to  the  extent  of  the  amount  due  him. 


McMASTER'S  COMMERCIAL  CASES, 
igoa,  PAGE  212A, 
IIS  N.  W.  726. 


M  Dm_  .  ^   /   — 


202 


Sec.  26.  What  Constitutes  Holder  for  Value.  Where  value  has  at 
any  time  been  given  for  the  instrument,  the  holder  is  deemed  a  holder 
for  value  in  respect  to  all  parties  who  became  such  prior  to  that  time. 
Cf.  sec.  52. 


Sec.  27.  When  Lien  on  Instrument  Constitutes  Holder  for  Value. 
Where  the  holder  has  a  lien  on  the  instrument,  arising  either  from  con- 
tract or  by  implication  of  law,  he  is  deemed  a  holder  for  value  to  the 
extent  of  his  lien. 

Sec.  28.  Effect  of  Want  of  Consideration.  Absence  or  failure  of  con- 
sideration is  matter  of  defense  as  against  any  person  not  a  holder  in  due 
course ;  and  partial  failure  of  consideration  is  a  defense  pro  tanto, 
whether  the  failure  is  an  ascertained  and  liquidated  amount  or  otherwise. 


Sec.  29.  Liability  of  Accommodation  Party.  An  accommodation 
party  is  one  who  has  signed  the  instrument  as  maker,  drawer,  acceptor 
or  indorser,  without  receiving  value  therefor,  and  for  the  purpose  of 
lending  his  name  to  some  other  person.  Such  a  person  is  liable  on  the 
instrument  to  a  holder  for  value,  notwithstanding  such  holder  at  the 
time  of  taking  the  instrument  knew  him  to  be  only  an  accommodation 
party. 

See  Illinois  Rev.  Stats.,  page  1538,  sec.  29. 


NO.  40. 

ACCOMMODATION: 
IRREGULAR  PAPER. 


McMASTER'S  COMMERCIAL  CASES, 
1913.  PAGE  102A. 
N.   1.  L. .  SEC.  64. 


/ 


NO.  41. 

PARTNERSHIP  INDORSEMENT 
ACCOMMODATION  PAPER: 
RENEWAL. 


'aper  indorsed  by  one  partner, —  renewal  i 
lorsed  by  other  partner. 


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NO.  42. 


CORPORATION:  INDOHSER: 
DIRECTORS:  STOCKHOLDERS: 


)ffer  of  directors  and  stockholders  to  bind 
Diation  by  accommodation  indorsemeaL 


McMABTER'8  COMKERCtAL  DIGEST. 
PAGE  GEO  A. 


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NO.  44. 


COLLATERAL: 
CHANCE  OF  TITLE; 
INDORSER. 


ndorscr  released,  for  reason  that  owner  of  note 
sented  to  change  of  title  and  possession  of 
aieral,  although  same  amount  and  kind  of  lien 
s  retained, 


McMASTER-8  COMMERCIAL  DIGEST. 
PAGE  327  A  ; 

es  NO.  e.  REP.  es. 


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ARTICLE  III. 
NEGOTIATION. 


Sec.  30.  What  Constitutes  Negotiation.  An  instrument  is  negotiated 
when  it  is  transferred  from  one  person  to  anotlier  in  such  manner  as  to 
constitute  the  tranferee  the  holder  thereof.  If  payable  to  bearer  it  is 
negotiated  by  delivery ;  if  payable  to  order  it  is  negotiated  by  the  indorse- 
ment of  the  holder  completed  by  delivery. 


NO.  45. 


HOLDER:  NEGOTIATION: 
PAYMENT  OF  A  CHECK. 


)istinction  drawn  between  "  payment "  and  "  nego- 
of  a  check. 


McMASTER'S  COMMERCIAU  CASES. 
1911,  PAGE  79A, 
129  N.  W.  279. 


So* 


sOTenty-tJjree  SO/lOO  dol 
Gross 

Net  Itis. 

Bat    1  A      12      10  buB. 


G  I  L  T  i  E  R,  NEB.  2/29/1906 
Pay  to  th^  oij^r  of        fh^nsr,  $573.80,  five  hundred 


per  t>u 

^  aay^4?^9B  Elevator  Co 


NO.  46. 

wJARANTY;  indorsemeni 


nain  guaranty  held  to  destroy  the  negotia. 

■of  a  note. 


CMASTER'S  COMMERCIAL  DIGEST, 
PAGE  I3A. 
I01  U.  5.  68. 


223 


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Sec.  31,  Indorsement;  How  Made.  The  indorsement  must  be  writ- 
ten on  the  instrument  itself  or  on  a  paper  attached  thereto.  The  sig- 
nature of  the  indorser,  without  additional  words,  is  a  sufficient  indorse- 
ment 

For  text  changes,  see  Illinois  Rev.  Stats.  1909,  sec.  31. 


O     C  J, 

S   b  s 


iS  .t; 


o  e 


5  g  I  i 


Sec.  32.  Indorsement  Must  Be  of  Entire  Instrument.  The  indorse- 
ment must  be  an  indorsement  of  the  entire  instrument.  An  indorsement, 
which  purports  to  transfer  to  the  indorsee  a  part  only  of  the  amount 
payble,  or  which  purports  to  transfer  the  instrument  to  two  or  more 
indorsees  severally,  does  not  operate  as  a  negotiation  of  the  instrument. 
But  where  the  instrument  has  been  paid  in  part,  it  may  be  indorsed  as 
to  the  residue. 

Sec.  33.  Kinds  of  Indorsement.   An  indorsement  may  be  either  spe- 


cial or  in  blank;  and  it  may  also  be  either  restrictive  or  qualified,  or 
conditional. 

Sec.  34.  Special  Indorsement;  Indorsement  in  Blank.  A  special  in- 
dorsement specifies  the  person  to  whom,  or  to  whose  order  the  instru- 
ment is  to  be  payable ;  and  the  indorsement  of  such  indorsee  is  necessary 
to  the  further  negotiation  of  the  instrument.  An  indorsement  in  blank 
specifies  no  indorsee,  and  an  instrument  so  indorsed  is  payable  to  bearer, 
and  may  be  negotiated  by  delivery.    Ct,  sec.  9. 


NO.  48. 


INDORSEMENT  IN  BLANK: 
TITLE. 


HcMASTER'S  COMMERCIAL  CASES. 
190S.  PAGE  181A. 


Johnson  City,  TEm.-^.^^^^'J^-.  /<Pr^3 


^  liiiiM 


Sec.  35.  Blank  Indorsement;  How  Changed  to  Special  Indorsement. 

The  holder  may  convert  a  blank  indorsement  into  a  special  indorsement 
by  writing  over  the  signature  of  the  indorser  in  blank  any  contract  con- 
sistent -with  the  character  of  the  indorsement. 

Sec.  36.  When  Indorsement  Restrictive.  An  indorsement  is  restrict- 
ive which  either : 


1.  Prohibits  the  further  negotiation  of  the  instrument;  or 

2.  Constitutes  the  indorsee  the  agent  of  the  indorser;  or 

3.  Vests  the  title  in  the  indorsee  in  trust  for  or  to  the  use  of  some 
other  person. 

But  the  mere  absence  of  words  implying  power  to  negotiate  does 
not  make  an  indorsement  restrictive. 


NO.  49. 


RESTRICTIVE  INDORSEMENT. 


ndorsement  for  collection.    Sec.  36,  Clause  2. 


McMASTER'S  COMMERCIAL  CASES, 
109S.  PAGE  13SA, 
83  S.  W.  537. 


S  3  J'"6e"-s'S»o-S«Ej;3'S«    >.2-g-Ss5S|  ii".Sv^S 


Jiliii  !  li  III! 


■ol  I.  aSsgS^  *  o  lgI.EE*?S 


236 


Sec.  37.  Effect  of  Restrictive  Indorsement;  Rights  of  Indorsee.  A 

restrictive  indorsement  confers  upon  the  indorsee  the  right : 

1.  To  receive  payment  of  the  instrument; 

2.  To  bring  any  action  thereon  that  the  indorser  could  bring; 

3.  To  transfer  his  rights  to  such  indorsee,  where  the  form  of  the 
indorsement  authories  him  to  do  so. 

But  all  subsequent  indorsees  acquire  only  the  title  of  the  first 
indorsee  under  the  restrictive  indorsement. 


For  additions  and  changes  in  text,  see  Illinois  Rev.  Stats.  1909, 
sec.  37. 

Sec.  38.  Qualified  Indorsement.  A  qualified  indorsement  constitutes 
the  indorser  a  mere  assignor  of  the  title  of  the  instrument.  It  may  be 
made  by  adding  to  the  indorser's  signature  the  words  "  without  re- 
course," or  any  words  of  similar  import.  Such  an  indorsement  does  not 
impair  the  negotiable  character  of  the  instrument. 


NO.  SO. 


WITHCUT  RECOURSE:  WARRANTY. 


Warranty  of  one  who  indorses  "  without 
icourse." 


CMASTER'S  COMMERCIAL.  DIGEST. 

PAGE  I37A. 
KAN.  137,  20  N.  Y.  226.  48  VT.  SOS. 
27  ME.  225.  38  IOWA.  329. 


Sec.  39.  Conditional  Indorsement.  Where  an  indorsement  is  con- 
ditional, a  party  required  to  pay  the  instrument  may  disregard  the  con- 
dition, and  make  payment  to  the  indorsee  or  this  transferee  whether  the 
condition  has  been  fulfilled  or  not.  But  any  person  to  whom  an  instru- 
ment so  indorsed  is  negotiated,  will  hold  the  same,  or  the  proceeds 
thereof,  suject  to  the  right  of  the  person  indorsing  conditionally. 


Sec.  40.  Indorsement  of  Instrument  Payable  to  Bearer.  Where  an 
instrument,  payable  to  bearer,  is  indorsed  specially,  it  may  nevertheless 
be  further  negotiated  by  delivery ;  but  the  person  indorsing  specially  is 
liable  as  indorser  to  only  such  holders  as  make  title  through  his 
indorsement. 

For  variation  in  text,  see  Rev.  Stats.  1909,  sec.  40. 


NO.  51 


PAYABLE  TO  BEARER: 
EFFECT  OF  INDORSEMENT. 

nee  a  bearer  instrument  a  special  indorsement 
not  change  its  character. 

McMASTER'S  COMMERCIAL  CASES. 
1913.  PAGE  77. 


fMtn)  1 


Sec.  41.  Indorsement  Where  Payable  to  Two  or  More  Persons. 
Where  an  instrument  is  payable  to  the  order  of  two  or  more  payees  or 
indorsees  who  are  not  partners,  all  must  indorse,  unless  the  one  indorsing 
has  authority  to  indorse  for  the  others. 

Text  change,  Missouri  Rev.  Stats.  1909,  ch.  86,  sec.  icon.  Wiscon- 
sin Laws  1906,  ch.  78,  sec.  1687. 


Sec.  42.  Effect  of  Instrument  Drawn  or  Indorsed  to  a  Person  as 
Cashier.  Where  an  instrument  is  drawn  or  indorsed  to  a  person  as 
"  cashier  "  or  other  fiscal  officer  of  a  bank  or  corporation,  it  is  deemed 
prima  facie  to  be  payable  to  the  bank  or  corporation  of  which  he  is  such 
officer;  and  may  be  negotiated  by  either  the  indorsement  of  the  bank  or 
corporation,  or  the  indorsement  of  the  officer. 


NO.  52. 

CORPORATION  NOTE: 
PAYEE. 

McMASTER'S  COMMERCIAL  CASES, 
1914.   PACE  76A, 
136  PAC.  418. 


Sec.  43.  Indorsement  Where  Name  is  Misspelled  or  Wrongly  Des- 
ignated. Where  the  name  of  a  payee  or  indorsee  is  wrongly  designated 
or  misspelled,  he  may  indorse  the  instrument  as  therein  described,  add- 
ing, if  he  thinks  fit,  his  proper  signature. 

Sec.  44.  Indorsement  in  Representative  Capacity.  Where  any  per- 
son is  under  obligation  to  indorse  in  a  representative  capacity,  he  may 
indorse  in  such  terms  as  to  negative  personal  liability.    Cf.  sec.  20. 


Sec.  45,  Time  of  Indorsement;  Presumption.  Except  where  an 
indorsement  bears  date  after  maturity  of  the  instrument,  every  negotia- 
tion is  deemed  prima  facie  to  have  been  effected  before  the  instrument 
was  overdue.    Cf.  sec.  52. 

Sec.  46.  Place  of  Indorsement;  Presumption.  Except  where  the  con- 
trary appears,  every  instrument  is  presumed  prima  facie  to  have  been 
made  at  the  place  where  the  instrument  is  dated. 


Sec.  47.  Continuation  of  Negotiable  Character.  An  instrument 
negotiable  in  its  origin  continues  to  be  negotiable  until  it  has  been 
restrictively  indorsed  or  discharged  by  payment  or  otherwise. 

Sec.  4S.  Striking  Out  Indorsement.  The  holder  may  at  any  time 
strike  out  any  indorsement  which  is  not  necessary  to  his  title.  The 
indorser  whose  indorsement  is  struck  out,  and  all  indorsers  subsequent 
to  him,  are  thereby  relieved  from  liability  on  the  instrument. 

Sec.  49.  Transfer  Without  Indorsement;  Effect  of.  Where  the 
holder  of  an  instrument  payable  to  his  order  transfers  it  for  value 


without  indorsing  it,  the  transfer  vests  in  the  transferee  such  title  as 
the  transferrer  had  therein,  and  the  transferee  acquires,  in  addition,  the 
right  to  have  the  indorsement  of  the  transferrer.  But  for  the  purpose 
of  determining  whether  the  transferee  is  a  holder  in  due  course,  the 
negotiation  takes  effect  as  of  the  time  when  the  indorsement  is  actually 
made. 

For  text  changes,  see  Colorado  Laws  1897,  ch.  64,  sec.  49 ;  Missouri 
Rev.  Stats,  1909,  ch.  86,  sec.  10019;  Illinois  Rev.  Stats.  1909,  page  1565, 
sec.  49;  Wisconsin  Laws  1906,  ch.  78,  sec.  1695. 


NO.  55. 


INDORSEMENT: 


PARTNERSHIP  SIGNATURE. 

'urchaser  of  nule  payable  "to  order," — which 
e  has  neglected  lo  indorse,  geis  title  to  the 
I  he  takes  it  as  a  non-negotiable  instru- 
;ubiect  to  the  offsets  of  the  maker. 


MeMASTER'S  COMMERCIAL  OiaKST, 
PAGE  614 a; 
81  N.  W.  REP.  TSB. 


u 


 Six  HvjncLiLSia.  


 jBMS  :  


Sec.  50.  When  Prior  Party  May  Negotiate  Instrument.  Where  an 
instrument  is  negotiated  back  to  a  prior  party,  such  party  may,  subject 
to  the  provisions  of  this  Act,  reissue  and  further  negotiate  the  same. 
But  he  is  not  entitled  to  enforce  payment  thereof  against  any  intervening 
party  to  whom  he  was  personally  liable. 


ARTICLE  IV. 
RIGHTS  OF  HOLDER. 


Sec.  51.  Rights  of  Holder  to  Sue;  Payment.  The  holder  of  a  nego- 
tiable instrument  may  sue  thereon  in  his  own  name;  and  payment  to 
him  in  due  course  discharges  the  instrument 

Sec.  52.  What  Constitutes  a  Holder  in  Due  Course.  A  holder  in 
due  course  is  a  holder  who  has  taken  the  instrument  under  thi  following 
conditions : 

I.  That  it  is  complete  and  regular  on  its  face : 


2.  That  he  became  holder  of  it  before  it  was  overdue,  and  without 
notice  that  it  had  been  previously  dishonored,  if  such  was  the  fact ; 

3.  That  he  took  it  in  good  faith  and  for  value ; 

4.  That  at  the  time  it  was  negotiated  to  him  he  had  no  notice  of 
any  infirmity  in  the  instrument  or  defect  in  the  title  of  the  person  nego- 
tiating it. 

For  text  change,  see  Wisconsin  Laws  1906,  ch.  78,  sec.  1677. 


NO.  57. 


INDORSEMENT: 
BONA-FIDE  PURCHASER. 

indorsement  as  follows  was  held  not  to  be  a 
ink  indorsement,  and  to  be  evidence  that  the 
ioRer  was  yet  the  owner  of  the  note  : 
"Pay  to  the  order  of 


Mary  W.  Graylord." 


MCMASTER'B  COMMERCIAL  DIGEST, 
PAGE  1 14  a: 


T4  NO.  W.  REP.  416. 


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CENT'S  DRAFT  ON  HIS  PRINCIPAL. 


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NO.  59. 


BONA-FIDE  HOLDER:  CREDIT. 


Bank  does  not  become  bona-fide  holder  by  simply 
tdiiing  a  oote  to  the  iadorser's  account. 


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Sec.  53.  When  Person  Not  Deemed  Holder  in  Due  Course.  Where 
an  instrument  is  defective  within  the  meaning  of  this  Act  when  he 
of  time  after  its  issue,  the  holder  is  not  deemed  a  holder  in  due  course. 

Sec.  54.  Notice  Before  Full  Amount  Paid.  Where  the  transferee 
receives  notice  of  any  infirmity  in  the  instrument  or  defect  in  the  title 
of  the  person  negotiating  the  same  before  he  has  paid  the  full  amount 
agreed  to  be  paid  therefor,  he  will  be  deemed  a  holder  in  due  course  only 
to  the  extent  of  the  amount  theretofore  paid  by  him. 


Sec.  55.  When  Title  Defective.  The  title  of  a  person  who  negotiates 
an  instrument  payable  on  demand  is  negotiated  an  unreasonable  length 
obtained  the  instrument,  or  any  signature  thereto,  by  fraud,  duress,  or 
force  and  fear,  or  other  unlawful  means,  or  for  an  illegal  consideration, 
or  when  he  negotiates  it  in  breach  of  faith,  or  under  such  circumstances 
as  amount  to  a  fraud. 

For  variation  in  text,  see  Kansas  Laws  19C9,  ch.  84,  sec.  55 ;  Wiscon- 
sin Laws  1906,  ch.  78,  sec.  1681. 


Sec.  56.  What  Constitutes  Notice  of  Defect.  To  constitute  notice 
of  an  infirmity  in  the  instrument  or  defect  in  title  of  person  negotiating 
the  same,  the  person  to  whom  it  is  negotiated  must  have  had  actual 
knowledge  of  the  infirmity  or  defect,  or  knowledge  of  such  facts  that 
his  action  on  taking  the  instrument  amounted  to  bad  faith.  Cf.  sec.  52, 
cl.  4- 


NO.  61. 


PARTNERSHIP ! 
lAYMENT  OF  INDIVIDUAL  DEBT  WITH 
FIRM'S  CHECK. 


IHMASTER'S  COMMERCIAL  DIQEB*' 
PAQE  206 a; 
41  S.  W.  REP.  tas. 
42  PET.  221. 


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NO.  62. 

PARTNERSHIP: 
BONA-FIDE  HOLDER. 

Ine  who  takes  In  payment  of  an  individual 
.,  ihe  check  of  a  firm,  signed  in  Ihe  firm  name 
ibe  debtor  who  is  a  member  of  the  firm,— takes 
,[h  notice  that  a  partner  cannot  use  partner, 
p  properly  to  pay  individual  debLs. 


MCMASTER'S  COMMERCIAL  DIGEST. 
PAGE  20SA: 
12  PET.  221 ; 


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No.  63. 

COLLATERAL:  CORPORATION. 


Instance  where  corporation  was  not  bound  1  ^ 
latementof  president  that  certain  of  iis  proper  < 
ad  been  transferred  to  him,— or  by  the  writu< 
issignment  of  the  property  by  the  secretary. 


3TA,  VOL.  1,  MCMABTER'S  REVERSED  CASES; 
6B  NO    E.  REP.  598. 


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No.  64. 

NOTE  PAYABLE  TO  A  TRUSTEE  - 
NON-NEGOTIABLE. 


MCMASTER'S  COMMERCIAL  DIGt>V 
PAGE  226  a; 
51  MD.  ISB. 


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COLLATERAL : 
STOCKS  PAYABLE  TO  TRUSTEES 
ASSIGNED  IN  BLANK. 


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NO.  67. 

INDORSEMENT:  CORPORATION-. 
WER  OF  OFFICER  TO  INDORSE  HELD 
NOT  TO  BE  POWER  TO  RECEIVE 
PROCEEDS  OF  PAPER. 


ERRORS  AND  APPEALS,  N.  J   MOV    W,  IB8T. 


Second  ^a.izon.al'Bo.nlC 

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NO,  70. 


HECK  OF  PRINCIPAL  DRAWN  BY 
AGENT  IN  PAYMENT  OF 
AGENT'S  DEBTS. 


166A,  VOL.  2. 
McMASTER  S  REVERSED  CASES. 


/^o.^OSSI.  TermAmhoyyMJ.  McU.  13.  ISqq 

laytdlh^orclero^   John  7i  AAiller.  Ailomey  

  vSeve7ity  /ive.  HimclrccL.  


To  llxe. 

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JDoUars 


Sec.  57.  Rights  of  Holder  in  Due  Course.  A  holder  in  due  course 
holds  the  instrument  free  from  any  defect  of  title  of  prior  parties,  and 
free  from  defense  available  to  prior  parties  among  themselves,  and  may 
enforce  payment  of  the  instrument  for  the  full  amount  thereof  against  all 
parties  liable  thereon. 

For  changes  in  text,  see  Illinois  Rev.  Stats.  1909,  sec.  57 ;  Wisconsin 
Laws  1906,  ch.  78,  sec.  1886. 


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Sec.  58.  When  Subject  to  Original  Defenses.  In  the  hands  of  any 
holder  other  than  a  holder  in  due  course,  a  negotiable  instrument  is  sub- 
ject to  the  same  defenses  as  if  it  were  non-negotiable.  But  a  holder 
who  derives  his  title  through  a  holder  in  due  course,  and  who  is  riot  him- 
self a  party  to  any  fraud  or  illegality  affecting  the  instrument,  has  all 
the  rights  of  such  former  holder  in  respect  of  all  parties  prior  to  the 
latter. 


Sec.  59.  Who  is  Deemed  a  Holder  in  Due  Course.  Every  holder  is 
deemed  prima  facie  to  be  a  holder  in  due  course;  but  when  it  is  shown 
that  the  title  of  any  person  who  has  negotiated  the  instrument  was 
defective,  the  burden  is  on  the  holder  to  prove  that  he  or  some  person 
under  whom  he  claims  acquired  the  title  as  holder  in  due  course.  But 
the  last  mentioned  rule  does  not  apply  in  favor  of  a  party  who  becomes 
bound  on  the  mstrument  prior  to  the  acquisition  of  such  title. 


ARTICLE  V. 
LIABILITIES  OF  PARTIES. 


Sec.  60.  Liability  of  Maker.  The  maker  of  a  negotiable  instrument 
by  making  it  engages  that  he  will  pay  it  according  to  its  tenor;  and 
admits  the  existence  of  the  payee  and  his  then  capacity  to  indorse. 

Sec.  61.  Liability  of  Drawer.  The  drawer  by  drawing  the  instru- 
ment admits  the  existence  of  the  payee  and  his  then  capacity  to  indorse; 
and  engages  that  on  due  presentment  the  instrument  will  be  accepted 
and  paid,  or  both,  according  to  the  tenor,  and  that  if  it  be  dishonored, 
and  the  necessary  proceedings  on  dishonor  be  duly  taken,  he  will  pay 
the  amount  thereof  to  the  holder,  or  to  any  subsequent  indorser  who 


may  be  compelled  to  pay  it.  But  the  drawer  may  insert  in  the  instru- 
ment an  express  stipulation  negotiating  or  limiting  his  own  liability  to 
the  holder. 

Sec.  62.  Liability  of  Acceptor.  The  acceptor  by  accepting  the  in- 
strument engages  that  he  will  pay  it  according  to  the  tenor  of  his 
acceptance,  and  admits : 

1.  The  existence  of  the  drawer,  the  genuineness  of  his  signature^ 
and  his  capacity  and  authority  to  draw  the  instrument;  and 

2.  The  existence  of  the  payee  and  his  then  capacity  to  indorse. 


NO.  73. 


DRAFTS: 
LIABILITY  OF  ACCEPTOR. 


iliere  commission  men  wired  a  bank  that  they 
ii  Iionor  draft  for  cost  of  cattle  consigned  to] 
was  held,  their  agreement  to  accept  thi 
ft  before  it  was  drawn  made  their  liability  the' 
that  it  would  have  been  had  they  accepted 
presentation.    133  111.  234. 


133  ILL.  234. 
McMASTER  S  COMMERCIAL  CASES. 
1909,  PAGE  11A. 
84  N.   E.  910. 


NO.  74. 


FORCED  INDORSEMENT 


■net  of  draft,  on  receiving  payment  thereof 
ihe  acceptor,  held  not  bound  to  furnish  gen- 
indorsement  of  payee,  if  lack  of  such  genuine 

Ddorsement  could   work   no   advantage   to  the 

fceptor  or  payor. 


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NO.  75. 

CERTIFIED  CHECK:   RAISED  CHECK. 


iiok  that  certifies  raised  check  is  only  liable  for 
)rigloat  amount  of  check  before  it  was  raised. 


MCMASTIR-S  COMMERCIAL  DIQCVT; 
PKQL  143  a; 
69  N.  V.  fiT, 


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Sec.  63.  When  Person  Deemed  Indorser.  A  person  placing  his  sig- 
nature upon  an  instrument  otherwise  than  as  maker,  drawer  or  acceptor 
is  deemed  to  be  an  indorser,  unless  he  clearly  indicates  by  appropriate 
words  his  intention  to  be  bound  in  some  other  capacity.    Cf.  sec.  17. 


NO.  76. 


LOUISVILLE  DEPOSIT  BANK. 

Louisville,  Ky. ,  January  28,  1903 


CERTIFICATE  OF  DEPOSIT: 
INDORSER. 

ing  not  in  accord  with  statute. 


MCMASTER'S  COMMERCIAL  CASES. 
1910.  PAGE  51A. 
121  S.  W.  426. 


THIS  IS  TO  CERTIFY  that  Andrew  Krebs  has  deposited  in  this 
bank  $1,473.32  payable  to  bis  order  six  months  after  date  on  the 
return  on  the  certificate  with  interest  at  the  rate  oi  four  per 
cent  per  annum,  interest  then  to  ces 


Sec.  64.  Liability  of  Irregular  Indorser.  Where  a  person,  not  other- 
wise a  party  to  an  instrument,  places  thereon  his  signature  in  blank 
before  delivery,  he  is  liable  as  indorser  in  accordance  with  the  following 
rules : 

I.  If  the  instrument  is  payable  to  the  order  of  a  third  person,  he  is 
liable  to  the  payee  and  to  all  subsequent  parties ; 


2.  If  the  instrument  is  payable  to  the  order  of  the  maker  or  drawer, 
or  is  payable  to  bearer,  he  is  liable  to  all  parties  subsequent  to  the 
maker  or  drawer; 

3.  If  he  signs  for  the  accommodation  of  the  payee,  he  is  liable  to  all 
parties  subsequent  to  the  payee. 

For  text  change,  see  Rev.  Stats.  1909,  sec.  64. 


NO.  77. 


DRAFTS:  IRREGULAR 
INDORSER:  LIABILITY. 


leg,  Insts.  Law,  Sees.  63,  68,  29. 


McMASTER'S  COMMERCfAL  CASES, 
1909,  PAGE  19IA, 
85  N.  E.  682. 


41  V 

COAL  OE?I CgJ 05^3 ADDO CK ,  BLANOIAJiD,  k  CO.,  INCORPORATED. 

w  York,  Apria  28,  1902. 

Four  months  af^er^^a?e~pay-  tT^Jip^prder  of  ourselves 

geyen  ancigll  Dollars 

To     Montauk  Coal  Co.  ^  '^Po- 
Brooklyn.  N*>4«)-^ 


Thirteen  hundred  twi 
Value  received 


to  the  account  of 


Sec.  65.  Warranty;  Where  Negotiation  by  Delivery,  et  Cetera. 
Every  person  negotiating  an  instrument  by  delivery  or  by  a  qualified 
indorsement,  warrants: 

1.  That  the  instrument  is  genuine  and  in  all  respects  what  it  pur- 
ports to  be; 

2.  That  he  has  good  title  to  it ; 

3.  That  all  prior  parties  had  capacity  to  contract ; 


4.  That  he  has  no  knowledge  of  any  fact  which  would  impair  the 
validity  of  the  instrument  or  render  it  valueless. 

But  when  the  negotiation  is  by  delivery  only,  the  warranty  extends 
in  favor  of  no  holder  other  than  the  immediate  transferee.  The  pro- 
visions of  subdivision  three  of  this  section  do  not  apply  to  persons  nego- 
tiating public  or  corporate  securities,  other  than  bills  and  notes. 


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Sec,  66.  Liability  of  General  Indorser.  Every  indorser  who  indorses 
without  qualification,  warrants  to  all  subsequent  holders  in  due  course: 

1.  The  matter  and  things  mentioned  in  subdivisions  one,  two  and 
three  of  the  next  preceding  section ;  and 

2.  That  the  instrument  is  at  the  time  of  his  indorsement  valid  and 
subsisting. 

And,  in  addition,  he  engages  that  on  due  presentment,  it  shall  be 


accepted  or  paid,  or  both,  as  the  case  may  be,  according  to  its  tenor,  and 
that  if  it  be  dishonored  and  the  necessary  proceedings  on  dishonor  be 
duly  taken,  he  will  pay  the  amount  thereof  to  the  holder,  or  any  sub- 
sequent indorser  who  may  be  compelled  to  pay  it. 

For  text  changes,  see  Illinois  Rev.  Stats.  1909,  sec.  66;  South  Dakota 
Laws  1913,  ch.  279,  sec.  66. 


NO.  79. 


NATURE  OF  CONTRACT  OF 
INDORSER. 


The  obligation  o£  an  indorser  is  a  new  and  inde-  | 
ndent  contract  separate  and  distinct  from  the  co 
d  evidenced  by  the  note. 


McMASTER'S  COMMERCIAL  CASES. 
1909.  PAGE  19A, 
tlO  N.  Y.  SUPP.  972. 


Jj(  /yifyijyfl^ji  %ef  Ju/r^  da^wTv.vi  date. 


-PROMISE  TO  PAYTO  i 


THE  ORDER  OF_ 


a^A^    ^--y^o        g  OLLARsI 


VuUE  RECEIVED 


Sec.  67.  Liability  of  Indorser  Where  Paper  Negotiable  by  Delivery. 
When  a  person  places  his  indorsement  on  an  instrument  negotiable  by 
delivery  he  incurs  all  the  liabilities  of  an  indorser.    Cf.  sees.  8,  9  and  30. 

For  text  changes,  see  Illinois  Rev.  Stats.  1909,  sec.  68. 

Sec.  68.  Order  in  which  Indorsers  Are  Liable.    As  respects  one 


another,  indorsers  are  liable  prima  facie  in  the  order  in  which  they 
indorse;  but  evidence  is  admissible  to  show  that  as  between  or  among 
themselves  they  have  agreed  otherwise.    Joint  payees  or  joint  indorsees 
who  indorse  are  deemed  to  indorse  jointly  and  severally. 
Illinois  Rev.  Stats.  1909,  sec.  69a. 


NO.  SO. 

EVIDENCE  ADMISSIBUE  AS  BE- 
TWEEN IMMEDIATE  PARTIES 
TO  SHOW  TRUE  RE- 
LATIONSHIP. 


MCMASTER'S  COMMERCIAL  CASES. 
1906.  PAGE  leSA. 
62  ATL.  410. 


 JIDm<B  


Sec.  69.  Liability  of  Agent  or  Broker.  Where  a  broker  or  other 
agent  negotiates  an  instrument  without  indorsement,  he  incurs  all  the 
liabilities  prescribed  by  section  65  of  this  Act,  unless  he  discloses  the 
name  of  his  principal,  and  the  fact  that  he  is  acting  only  as  agent. 
Cf.  sec.  20. 


ARTICLE  VI. 
PRESENTMENT  FOR  PAYMENT. 


Sec.  70.  Effect  of  Want  of  Demand  on  Principal  Debtor.  Present- 
ment for  payment  is  not  necessary  in  order  to  charge  the  person  pri- 
marily liable  on  the  instrument;  but  if  the  instrument  is,  by  its  terms, 
payable  at  a  special  place,  and  he  is  willing  and  able  to  pay  it  there  at 
maturity  and  has  funds  there  available  for  that  purpose,  such  ability  and 
willingness  are  equivalent  to  a  tender  of  payment  upon  his  part.  But 


except  as  herein  otherwise  provided,  presentment  for  payment  is  neces- 
sary in  order  to  charge  the  drawer  and  indorsers,  Payable  at  a  Bank, 
sec.  87. 

See  Illinois  Rev.  Stats.  1909,  sec.  70;  Kansas  Laws  1909,  ch.  84, 
sec.  70;  New  York  Consol.  Laws,  ch.  38;  Ohio  Civil  Code,  1910,  sec. 
1806;  Wisconsin  Laws  1906,  ch.  78,  sec.  1678. 


Sec.  71.  Presentment  Where  Instrument  is  not  Payable  on  Demand. 
Where  the  instrument  is  not  payable  on  demand,  presentment  must  be 
made  on  the  day  it  falls  due.  Where  it  is  payable  on  demand,  present- 
ment must  be  made  within  a  reasonable  time  after  its  issue,  except  that 
in  the  case  of  a  bill  of  exchange,  presentment  for  payment  will  be  suf- 
ficient if  made  within  a  reasonable  time  after  the  last  negotiation  thereof. 


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NO.  84. 


BONA-FIDE  HOLDER: 
OFFSET:  STALE  DEMAND  PAPER 


Mker's  draft  which  is  not  presented  in  reason- 
(Ime,  held  to  be  past  due  paper  and  subject  lo 

tts  of  the  bank  against  previous  holder, — 
igh  the  draft  subsequently  passed  to  innocent 

rdasers. 


McMASTKR'S  COMMERCIAL  DIGCtT, 
PAGE  1 1 1  A ; 
31  MINN.  33. 


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Sec.  72.  What  Constitutes  a  Sufficient  Presentment.  Presentment 
for  payment  to  be  sufficient,  must  be  made; 

1.  By  the  holder,  or  by  some  person  authorized  to  receive  payment 
on  his  behalf; 

2.  At  a  reasonable  hour  on  a  business  day ; 

3.  At  a  proper  place  as  herein  defined ; 

4.  To  a  person  primarily  liable  on  the  instrument,  or  if  he  is  absent 
or  inaccessible,  to  any  person  found  at  the  place  where  the  presentment 
is  made.    A  proper  place,  post. 

Sec.  73.  Place  of  Presentment.  Presentment  for  payment  is  made 
at  the  proper  place: 

1.  Where  the  place  of  payment  is  specified  in  the  instrument  and  it 
is  there  presented; 

2.  Where  no  place  of  payment  is  specified,  but  the  address  of  the 
person  to  make  payment  is  given  in  the  instrument  and  it  is  there 
presented; 


3.  Where  no  place  of  payment  is  specified  and  no  address  is  given 
and  the  instrument  is  presented  at  the  usual  place  of  business  or  resi- 
dence of  the  person  to  make  payment. 

4.  In  any  other  case  if  presented  to  the  person  to  make  payment 
wherever  he  can  be  found,  or  if  presented  to  his  last  known  place  of 
business  or  residence. 

Sec.  74.  Instrument  Must  Be  Exhibited.  The  instrument  must  be 
exhibited  to  the  person  from  whom  payment  is  demanded,  and  when  it 
is  paid  must  be  delivered  up  to  the  party  paying  it. 

Sec.  75.  Presentment  Where  Instrument  Payable  at  Bank.  Where 
the  instrument  is  payable  at  a  bank,  presentment  for  payment  must  be 
made  during  banking  hours,  unless  the  person  to  make  payment  has  no 
funds  there  to  meet  it  at  any  time  during  the  day,  in  which  case  pre- 
sentment at  any  hour  before  the  bank  is  closed  on  that  day  is  sufficient. 

For  text  change,  see  Nebraska  Comp.  Stat.  1912,  ch.  41,  sec.  75. 


Sec.  76,  Presentment  When  Principal  Debtor  is  Dead.  Where  the 
person  primarily  liable  on  the  instrument  is  dead,  and  no  place  of  pay- 
ment is  specified,  presentment  for  payment  must  be  made  to  his  personal 
representative,  if  such  there  be,  and  if  with  the  exercise  of  reasonable 
diligence  he  can  be  found. 

Sec.  77.  Presentment  to  Persons  Liable  as  Partners.  Where  the 
persons  primarily  liable  on  the  instrument  are  liable  as  partners,  and 
no  place  of  payment  is  specified,  presentment  for  payment  may  be  made 
to  any  one  of  them,  even  though  there  has  been  a  dissolution  of  the  firm. 

Sec.  78.  Presentment  to  Joint  Debtors.  Where  there  are  several 
persons  not  partners  primarily  liable  on  the  instrument,  and  no  place  of 
payment  is  specified,  presentment  must  be  made  to  them  all. 


Sec.  79.  When  Presentment  not  Required  to  Charge  the  Drawer. 
Presentment  for  payment  is  not  required  in  order  to  charge  the  drawer 
where  he  has  no  right  to  expect  or  require  that  the  drawee  or  acceptor 
will  pay  the  instrument. 

Sec.  80.  When  Presentment  not  Required  to  Charge  the  Indorser. 

Presentment  for  payment  is  not  required  to  charge  an  indorser  where 
the  instrument  was  made  or  accepted  for  his  accommodation,  and  he  has 
no  reason  to  expect  that  the  instrument  will  be  paid  if  presented. 

Sec.  81.  Where  Delay  in  Making  Presentment  is  Excused.  Delay 
in  making  presentment  for  payment  is  excused  when  the  delay  is  caused 
by  circumstances  beyond  the  control  of  the  holder  and  not  imputable  to 
his  fault,  misconduct  or  negligence.  When  the  causes  of  delay  cease 
to  operate,  presentment  must  be  made  with  reasonable  diligence. 


Sec.  82.  When  Presentment  May  be  Dispensed  With.  Presentment 
for  payment  is  dispensed  with : 

1.  Where  after  the  exercise  of  reasonable  diligence  presentment  as 
required  by  this  Act  cannot  be  made ; 

2.  Where  the  drawee  is  a  fictitious  person ; 

3.  By  waiver  of  presentment  express  or  implied.  Notice  dispensed 
with,  sec.  112. 


Sec.  83.  When  Instrument  Dishonored  by  Non-Payment.  The  in- 
strument is  dishonored  by  non-payment  when : 

1.  It  is  duly  presented  for  payment  and  payment  is  refused  or  can- 
not be  obtained ;  or 

2.  Presentment  is  excused  and  the  instrument  is  overdue  and  unpaid. 
Cf.  sec.  III. 


Sec.  84.  Liability  of  Person  Secondarily  Liable,  When  Instrument 
Dishonored.  Subject  to  the  provisions  of  the  Act,  when  the  instrument 
is  dishonored  by  non-payment,  an  immediate  right  of  recourse  to  all 
parties  secondarily  liable  thereon,  accrues  to  the  holder. 

Sec.  85.  Time  of  Maturity.  Every  negotiable  instrument  is  payable 
at  the  time  fixed  therein  without  grace.  When  the  day  of  maturity 
falls  upon  Sunday,  or  a  holiday,  the  instrument  is  payable  on  the  next 
succeeding  business  day.  Instruments  falling  due  or  becoming  payable 
on  Saturday  are  to  be  presented  for  payment  on  the  next  succeeding 
business  day,  except  that  instruments  payable  on  demand  may,  at  the 
option  of  the  holder,  be  presented  for  payment  before  twelve  o'clock 
noon  on  Saturday  when  that  entire  day  is  not  a  holiday. 


Many  of  the  states  adopting  the  Negotiable  Instruments  Law  have 
changed  the  text  of  this  section  by  introducing  exceptions.    See  Laws. 
.Ma. 

Sec.  86.  Time;  How  Computed.  Where  the  instrument  is  payable 
at  a  fixed  period  after  date,  after  sight,  or  after  the  happening  of  a  speci- 
fied event,  the  time  of  payment  is  determined  by  excluding  the  day  from 
which  the  time  is  to  begin  to  run,  and  by  including  the  date  of  payment. 

Sec.  87.  Rule  Where  Instrument  Payable  at  Bank.  Where  the 
instrument  is  made  payable  at  a  bank  it  is  equivalent  to  an  order  to  the 
bank  to  pay  the  same  for  the  account  of  the  principal  debtor  thereon. 

In  Illinois,  Nebraska  and  South  Dakota  this  section  is  omitted.  A 
slight  change  in  South  Dakota. 


Sec.  88.  What  Constitutes  Payment  in  Due  Course.  Payment  is 
made  in  due  course  when  it  is  made  at  or  after  the  maturity  of  the 
instrument  to  the  holder  thereof  in  good  faith  and  without  notice  that 
his  title  is  defective. 


ARTICLE  VII. 
NOTICE  OF  DISHONOR. 


Sec.  89.  To  Whom  Notice  of  Dishonor  Must  be  Given.  Except  as 
herein  otherwise  provided,  when  a  negotiable  instrument  has  been  dis- 
honored by  non-acceptance  or  non-payment,  notice  of  dishonor  must 
be  given  to  the  drawer  and  to  each  indorser,  and  any  drawer  or  indorser 
to  whom  such  notice  is  not  given  is  discharged. 


NO.  88. 


DISHONOR: 
SUFFICIENCY  OF  NOTICE. 


MCMASTER'S  COMMERCIAL  CASES, 
1907,    PAGE  98 A. 
64  ATL.  874. 


'6 


Sec.  90.  By  Whom  Given.  The  notice  may  be  given  by  or  on  behalf 
of  the  holder,  or  by  or  on  behalf  of  any  party  to  the  instrument  who 
might  be  compelled  to  pay  it  to  the  holder,  and  who,  upon  taking  it  up, 
would  have  a  right  to  reimbursement  from  the  party  to  whom  the  notice 
is  given. 

Sec.  91.  Notice  Given  by  Agent.  Notice  of  dishonor  may  be  given 
by  an  agent  either  in  his  own  name  or  in  the  name  of  any  party  entitled 
to  give  notice,  whether  that  party  be  his  principal  or  not. 

Sec.  92.  Effect  of  Notice  Given  on  Behalf  of  Holder.  Where  notice 
is  given  by  or  on  behalf  of  the  holder  it  inures  to  the  benefit  of  all  subse- 
quent holders  and  all  prior  parties  who  have  a  right  of  recourse  against 
the  party  to  whom  it  is  given.    Read  in  connection  with  section,  post. 

Sec.  93.  Effect  Where  Notice  is  Given  by  Party  Entitled  Thereto. 
When  notice  is  given  by  or  on  behalf  of  a  party  entitled  to  give  notice. 


it  inures  to  the  benefit  of  the  holder  and  all  parties  subsequent  to  the 
party  to  whom  notice  is  given. 

Sec.  94.  When  Agent  May  Give  Notice.  Where  the  instrument  has 
been  dishonored  in  the  hands  of  an  agent,  he  may  either  himself  give 
notice  to  the  parties  liable  thereon,  or  he  may  give  notice  to  his  principal. 
If  he  give  notice  to  his  principal,  he  must  do  so  within  the  same  time  as  if 
he  were  the  holder,  and  the  principal  upon  the  receipt  of  such  notice  has 
himself  the  same  time  for  giving  notice  as  if  the  agent  had  been  an 
independent  holder. 

Sec.  95.  What  Notice  Sufficient.  A  written  notice  need  not  be 
signed,  and  an  insufficient  written  notice  may  be  supplemented  and  vali- 
dated by  verbal  communication.  A  misdescription  of  the  instrument 
does  not  vitiate  the  notice  unless  the  party  to  whom  the  notice  is  given 
is  in  fact  misled  thereby.    Cf.  section,  post. 

Sec.  96.  Form  of  Notice.   The  notice  may  be  in  writing  or  merely 


oral  and  may  be  given  in  any  terms  whicli  sufficiently  identify  the  instru- ; 
ment,  and  indicate  that  it  has  been  dishonored  by  non-acceptance  or 
non-payment.  It  may  in  all  cases  be  given  by  delivering  it  personally  or 
through  the  mails.         .  . 

Sec.  97.  To  Whom  Notice  May  be  Given.  Notice  of  dishonor  may 
be  given  either  to  the  party  himself  or  to  his  agent  in  that  behalf. 

Sec.  98.  Notice  Where  Party  is  Dead.  When  any  party  is  dead,  and 
his  death  is  known  to  the  party  giving  notice,  the  notice  must  be  given 
to  a  personal  representative,  if  there  be  one,  and  if  with  reasonable  dili- 
gence, he  can  be  found.  If  there  be  no  personal  representative,  notice 
may  be  sent  to  the  last  residence  or  last  place  of  business  of  the  deceased. 

Sec.  99.  Notice  lo  Partners.  Where  the  parties  to  be  notified  are 
partners  notice  to  any  one  partner  is  notice  to  the  firm  even  though  there 
has  been  a  dissolution. 


Sec.  100.  Notice  to  Persons  Jointly  Liable.  Notice  to  joint  parties 
who  are  not  partners  must  be  given  to  each  of  them,  unless  one  of  them 
has  authority  to  receive  such  notice  for  the  others.  ' 

Sec.  101.  Notice  to  Bankrupt.  Where  a  party  has  been  adjudged  a 
bankrupt  or  is  insolvent,  or  has  made  an  assignment  for  the  benefit  of 
creditors,  notice,  may  be  given  either  to  the  ,  party  .himself  or  .to- his 
trustee  or  assignee,  , '  ' 

Sec.  102.  Time  Within  Which  Notice  Must  be  Given.  Notice  may 
be  given  as  soon  as  the  instrument  is  dishonored;  and  unless  delay  is 
excused  as  hereinafter  provided,  must  be  given  within  the  times  fixed  by 
this  Act. 

Sec.  103.  Where  Parties  Reside  in  the  Same  Place.  Where  the  per- 
son giving  and  the  person  to  receive  notice  reside  in  the  same  place, 
notice  must  be  given  within  the  following  times ;       .       ■\'  " 


1.  If  given  at  the  place  of  business  of  the  person  to  receive  notice, 
it  must  be  given  before  the  close  of  business  hours  on  the  day  following. 

Sec.  104.  Where  Parties  Reside  in  Different  Places.  Where  the 
person  giving  and  the  person  to  receive  notice  reside  in  different  places, 
the  notice  must  be  given  within  the  following  times : 

r.  If  sent  by  mail,  it  must  be  deposited  in  the  post-office  in  time  to 
go  by  mail  the  day  following  the  day  of  dishonor,  or  if  there  be  no  mail 
at  a  convenient  hour  on  that  day,  by  the  next  mail  thereafter. 

2.  If  given  otherwise  than  through  the  post-office,  then  within  the 
time  that  notice  would  have  been  received  in  due  course  of  mail,  if  it 
had  been  deposited  in  the  post-office  within  the  time  specified  in  the  last 
subdivision.  _  _ 

Sec.  105.  When  Sender  Deemed  to  Have  Given  Due  Notice.  Where 
notice  of  dishonor  is  duly  addressed  and  deposited  in  the  post-office,  the 
sender  is  deemed  to  have  given  due  notice,  notwithstanding  any  mis- 
carriage in  the  mails. 


Sec.  106.  Deposit  in  Post-Office;  What  Constitutes.  Notice  is 
deemed  to  have  been  deposited  in  the  post-office  when  deposited  in  any 
branch  post-office  or  in  any  letter  box  under  the  control  of  the  post- 
office  department. 

Sec.  107.  Notice  to  Antecedent  Party;  Time  of.  Where  a  party 
receives  notice  of  dishonor,  he  has,  after  the  receipt  of  such  notice,  the 
same  time  for  giving  notice  to  antecedent  parties  that  the  holder  has 
after  the  dishonor. 

Sec.  108.  Where  Notice  Must  be  Sent.  Where  a  party  has  added 
an  address  to  his  signature,  notice  of  dishonor  must  be  sent  to  that 
address;  but  if  he  has  not  given  such  address,  then  the  notice  must  be 
sent  as  follows : 

1.  Either  to  the  post-office  nearest  to  his  place  of  residence,  or  to 
the  post-office  where  he  is  accustomed  to  receive  his  letters;  or 

2.  If  he  live  in  one  place,  and  have  his  place  of  business  in  another, 
notice  may  be  sent  to  either  place;  or 


3-  If  he  is  sojourning  in  another  place,  notice  may  be  sent  to  the 
place  where  he  is  so  sojourning. 

But  where  the  notice  is  actually  received  by  the  party  within  the 
time  specified  in  this  Act,  it  will  be  sufficient,  though  not  sent  in  accord- 
ance with  the  requirements  of  this  section. 


Sec.  109.  Waiver  of  Notice.  Notice  of  dishonor  may  be  waived 
either  before  the  time  of  giving  notice  has  arrived,  or  after  the  omission 
to  give  due  notice,  and  the  waiver  may  be  express  or  implied. 


Sec.  no.  Whom  Affected  by  Waiver.  Where  the  waiver  is  embodied 
in  the  instrument  itself,  it  is  binding  upon  all  parties;  but  where  it  is 
written  above  the  signature  of  an  indorser,  it  binds  him  only. 

Sec.  III.  Waiver  of  Protest.  A  waiver  of  protest,  whether  in  the 
case  of  a  foreign  bill  of  exchange  or  other  negotiable  instrument,  is 
deemed  to  be  a  waiver  not  only  of  a  formal  protest,  but  also  of  presenta- 
tion and  notice  of  dishonor. 


NO.  90. 


PROTEST. 


waiver  of  demand  not  a  waiver  of  notice  as  a 
:ij  o£  law. 


McMASTER  S  COMMERCIAL  CASES, 
1913,  PAGE  117A, 
too  N.  E.  554. 


Z  .Mb  Winnns  f>^>^  Ownfiai^  Kiyiitfon  S>..vy. 


Sec.  112.  When  Notice  is  Dispensed  With.  Notice  of  dishonor  is 
dispensed  with  when,  after  the  exercise  of  reasonable  diligence,  it  cannot 
be  given  to  or  does  not  reach  the  parties  sought  to  be  charged.  Cf. 
sec.  82. 


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NO.  92. 


PROTEST. 


;closing  notice   for  prior   iadorsers   to  last 


9IA.  VOL.  I. 
McMASTER  S  REVERSED  CASES. 


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Sec  113  Delay  in  Giving  Notice;  How  Excused.  Delay  in  giving 
notice  of  dishonor  is  excused  when  the  delay  is  caused  by  circumstances 
beyond  the  control  of  the  holder  and  not  imputable  to  his  default,  mis- 
conduct or  negligence.  When  the  cause  of  delay  ceases  to  operate, 
notice  must  be  given  with  reasonable  diligence.    Cf.  sec.  81. 

Sec  114  When  Notice  Need  not  be  Given  to  Drawer.  Notice  of 
dishonor  is  not  required  to  be  given  to  the  drawer  in  either  of  the  follow- 
ing cases:  ^ 

I  Where  the  drawer  and  drawee  are  the  same  person ; 

2.  Where  the  drawee  is  a  fictitious  person  or  a  person  not  having 
capacity  to  contract;  ... 

3.  Where  the  drawer  is  the  person  to  whom  the  instrument  is  pre- 
sented for  payment; 


4.  Where  the  drawer  has  no  right  to  expect  or  require  that  the 
drawee  or  acceptor  will  honor  the  instrument ; 

5.  Where  the  drawer  has  countermanded  payment. 

Sec  115  When  Notice  Need  not  be  Given  to  Indorser.  Notice  of 
dishonor  is  not  required  to  be  given  to  an  indorser  in  either  of  the  fol- 
lowing cases :  . 

I  Where  the  drawee  is  a  fictitious  person  or  a  person  not  having 
capacity  to  contract,  and  the  indorser  was  aware  of  the  fact  at  the  time 
he  indorsed  the  instrument; 

2.  Where  the  indorser  is  the  person  to  whom  the  instrument  is  pre- 
sented for  payment ;  ,  ,    ,  .  „„j, 

3.  Where  the  instrument  was  made  or  accepted  for  his  accommoda- 
tion. 


Sec.  Ii6.  Notice  of  Non-Payment  Where  Acceptance  Refused. 
Where  due  notice  of  dishonor  by  non-acceptance  has  been  given,  notice 
of  a  subsequent  dishonor  by  non-payment  is  not  necessary,  unless  in  the 
meantime  the  instrument  has  been  accepted. 

Sec.  117.  Effect  of  Omission  to  Give  Notice  of  Non-Acceptance.  An 
omission  to  give  notice  of  dishonor  by  non-acceptance  does  not  prejudice 
the  rights  of  a  holder  in  due  course  subsequent  to  the  omission. 

For  text  change,  see  Wisconsin  Laws  1906,  ch.  78,  sees.  1679-20. 

Sec.  118.  When  Protest  Need  not  be  Made;  When  Must  be  Made. 

Where  any  negotiable  instrument  has  been  dishonored  it  may  be  pro- 
tested for  non-acceptance  or  non-payment,  as  the  case  may  be ;  but  pro- 
test is  not  required,  except  in  the  case  of  foreign  bills  of  exchange.  Cf. 
sec.  129. 


ARTICLE  VIII. 
DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS. 


Sec.  119.  Instrument;  How  Discharged.  A  negotiable  instrument 
is  discliarged : 

1.  By  payment  in  due  course  by  or  on  behalf  of  the  principal 
debtor; 

2.  By  payment  in  due  course  by  the  party  accommodated,  where  the 
instrument  is  made  or  accepted  for  accommodation; 

3.  By  the  intentional  concellation  thereof  by  the  holder; 

4.  By  any  other  act  which  will  discharge  a  simple  contract  for  the 
payment  of  money; 

5.  When  the  principal  debtor  becomes  the  holder  of  the  instrument 
at  or  after  maturity  in  his  own  right. 

For  omission,  see  Illinois  Rev.  Stats.  1909,  sec.  119. 


NO.  94 


ISCHARGE:  MAKER  AS  SURETY. 

[inderford's  executors  set  up  a  claim  that  testator  j 
signed  this  note  as  a  surety,  and  not  as  a  joint 
^ti,  and  that  he  had  been  discharged  by  reason 
in  extension  of  time  granted  by  the  cashier  of  the 
t  no  claim  was  made  that  he  was  discharged  , 
>r  the  other  particular  way  specified  in  the  i 


McMASTER'S  COMMERCIAL  CASES. 
1907.  PAGE  223A, 
66  ATU.  47. 


gflat.mlnat.ar  ,  M<i  . 


AHgllHt  dth, 


.  ,      jointly  and  severall;^ 


Tmn  mnnt.ha 


^fi'/y/y/l//:^ •Vtirm.f'.r^.      Machanins  -ffattonal  TlanV  of  Tentmi nst.er .  Mrt 


TVirse  hun<<ri»(^  and  --  -  no/lOQ. 


 rnrRB  nuniiiEu  aim —  -  -— 

payable  at  the  banking  house  of  the  said  Faraers  &  Mechanics  National 
"bank  of  Westminister.  For  value  received, hereby  waiving  the  right 
of  all  homestead,  stay,  and  exemption  laws.  -  — 


1^ 


NO.  96. 


PARTNERSHIP: 
SURETY  RELEASED. 


■archase  by  a  firm  of  a  note  of  one  of  the  part- 
1  extinguishes  the  note  both  as  to  the  maker 

indorsers. 


McMABTER-B  COMMERCIAL  DIOUT, 

PAGE  lesA; 
46  SO.  w.  REP.  era. 


o 


Sec.  120.  When  Persons  Secondarily  Liable  Are  Discharged.  A 
person  secondarily  liable  on  the  instrument  is  discharged: 

1.  By  any  act  which  discharges  the  instrument; 

2.  By  the  intentional  cancellation  of  his  signature  by  the  holder; 

3.  By  the  discharge  of  a  prior  party; 

4.  By  a  valid  tender  of  payment  made  by  a  prior  party; 

5.  By  a  release  of  the  principal  debtor,  unless  the  holder's  right  of 
recourse  against  the  party  secondarily  liable  is  expressly  reserved. 

But  any  agreement  binding  upon  the  holder  to  extend  the  time  of 
payment  or  to  postpone  the  holder's  right  to  enforce  the  instrument, 
unless  the  rights  of  recourse  against  such  party  is  expressly  reserved. 

A  number  of  the  States  having  enacted  a  Negotiable  Instruments 
Law  omit  substitute  clauses  and  except.    See  Laws. 


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Sec.  121.  Right  of  Party  Who  Discharges  Instrument.  Where  the 
instrument  is  paid  by  a  party  secondarily  liable  thereon,  it  is  not  dis- 
charged ;  but  the  party  so  paying  it  is  remitted  to  his  former  rights  as 
regards  all  prior  parties,  and  he  may  strike  out  his  own  and  all  subse- 
quent indorsements,  and  again  negotiate  the  instrument,  except: 

1.  Where  it  is  payable  to  the  order  of  a  third  person,  and  has  been 
paid  by  the  drawer;  and 

2.  Where  it  was  made  or  accepted  for  accommodation,  and  has 
been  paid  by  the  party  accommodated. 

Sec.  122.  Renunciation  by  Holder.  The  holder  may  expressly  re- 
nounce his  rights  against  any  party  to  the  instrument,  before,  at  or  after 
its  maturity.  An  absolute  and  unconditional  renunciation  of  his  rights 
against  the  principal  debtor,  made  at  or  after  the  maturity  of  the  instru- 
ment, discharges  the  instrument.  But  a  renunciation  does  not  affect  the 
rights  of  a  holder  in  due  course  without  notice.    A  renunciation  must 


be  in  writing,  unless  the  instrument  is  delivered  up  to  the  person  pri- 
marily liable  thereon. 

Sec.  123.  Cancellation;  Unintentional;  Burden  of  Proof.  A  cancel- 
lation made  unintentionally,  or  under  a  mistake,  or  without  the  authority 
of  the  holder,  is  inoperative;  but  where  an  instrument  or  any  signature 
thereon  appears  to  have  been  canceled  the  burden  of  proof  lies  on  the 
party  who  alleges  that  the  cancellation  was  made  unintentionally,  or 
under  a  mistake  or  without  authority. 

Sec.  124.  Alteration  of  Instrument;  Effect  of.  Where  a  negotiable 
instrument  is  materially  altered  without  the  assent  of  all  parties  liable 
thereon,  it  is  avoided,  except  as  against  a  party  who  has  himself  made, 
authorized  or  assented  to  the  alteration,  and  subsequent  indorsers.  But 
when  an  instrument  has  been  materially  altered  and  is  in  the  hands  of 


a  holder  in  due  course,  not  a  party  to  the  alteration,  he  may  enforce 
payment  thereof  according  to  its  original  tenor. 

For  text  changes,  see  Illinois  Rev.  Stats.  1909,  sec.  124;  New  Mexico 
Laws  1907,  ch,  83,  sec.  124;  Wisconsin  Laws  1906,  ch.  78,  sec.  1660-131. 

Sec.  125.  What  Constitutes  a  Material  Alteration.    Any  alteration 
which  changes: 
I.  The  date : 


2.  The  sum  payable,  either  for  principal  or  interest; 

3.  The  time  or  place  of  payment; 

4.  The  number  or  relation  of  the  parties ; 

5.  The  medium  or  currency  in  which  payment  is  to  be  made;  or 
which  adds  a  place  of  payment  where  no  place  of  payment  is  specified, 
or  any  other  change  or  addition  which  alters  the  effect  of  the  instrument 
in  any  respect,  is  a  material  alteration.  \ 


NO.  103. 


ALTERATION. 


A  material  aTteration  of  cotnmerclal  paper  Is 

j],  even  if  innocently  made,  and  the  liability  of 
iters  and  lodoi^ers  reduced  in  amouDL 


MMHAaTER'S  COMMERCIAL  DKinT. 

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NO.  104. 


ALTERATION. 


iDserting  name  of  second  ladorser  as  additional 


MCMASTER'S  COMMCRCIAL  DIQE8T. 
PAGE  30  A  : 
3T  MICH.  468 


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TITLE  II.    BILLS  OF  EXCHANGE. 
ARTICLE  I. 
FORM  AND  INTERPRETATION. 


Sec.  126.  Bill  of  Exchange  Defined.  A  bill  of  exchange  is  an  uncon- 
ditional order  in  writing  addressed  by  one  person  to  another,  signed  by 
the  person  giving  it,  requiring  the  person  to  whom  it  is  addressed  to 
pay  on  demand  or  at  a  fixed  or  determinable  future  time  a  sum  certain 
in  money  to  order  or  to  bearer. 

Sec.  127.  Bill  not  an  Assignment  of  Funds  in  Hands  of  Drawee.  A 
bill  of  itself  does  not  operate  as  an  assignment  of  the  funds  in  the  hands 
of  the  drawee  available  for  the  payment  thereof  and  the  drawee  is  not 
liable  on  the  bill  unless  and  until  he  accepts  the  same.  Checks,  cf. 
sec.  189. 


Sec.  128.  Bill  Addressed  to  More  Than  One  Drawee.  A  bill  may 
be  addressed  to  two  or  more  drawees  jointly,  whether  they  are  partners 
or  not;  but  not  to  two  or  more  drawees  in  the  alternative  or  in  suc- 
cession. 

Sec.  129  Inland  and  Foreign  Bills  of  Exchange.  An  inland  bill  of 
exchange  is  a  bill  which  is,  or  on  its  face  purports  to  be,  both  drawn  and 
payable  within  the  State.  Any  other  bill  is  a  foreign  bill.  Unless  the 
contrary  appears  on  the  face  of  the  bill,  the  holder  may  treat  it  as  an 
inland  bill. 


NO.  107. 


CONFLICT  OF  LAWS. 


liN.  I.  L.,  sec.  46. 


UcMASTER'S  COMMERCIAL  CASES. 
I908.  PAGE  166A. 
82  N.  E.  134. 


"New  York,  Jan.  8,  1901. 

"Exchange  for  i  2,058  6/8. 

"On  demand  of  this  original  cheque  (duplicate  unpaid)  pay 
to  the  order  of  Rogers,  Brovm  &  Company,  Twenty-two  hundred  and  fifty- 
eight  pounds  6/8,  pavatle  at  rate  for  bamkers  cheques  on  London  value 
received  and  charge  the  same  to  account  of  plg-lron  per  S.S.Quarnero. 

\^        ■  ^ 

"To  MesB.  A.  Herm.  Praanclcl  Soehno, 

"Ruepgasse,  Vienna,  Austria. 
"Ho.  75." 


Sec.  130.  When  Bill  May  be  Treated  as  a  Promissory  Note.  Where 
in  a  bill  the  drawer  and  drawee  are  the  same  person,  or  when  the  drawee 
is  a  fictitious  person,  or  a  person  not  having  capacity  to  contract,  the 
holder  may  treat  the  instrument  at  his  option,  either  as  a  bill  of  exchange 
or  a  promissory  note.    Cf.  sec.  17,  cl.  5. 

Sec.  131.  Referee  in  Case  of  Need.  The  drawer  of  a  bill  and  any 
indorser  may  insert  thereon  the  name  of  a  person  to  whom  the  holder 
may  resort  in  case  of  need,  that  is  to  say,  in  case  the  bill  is  dishonored  by 
non-acceptance  or  non-payment.  Such  person  is  called  the  referee  in 
case  of  need  or  not  as  he  may  see  fit. 


ARTICLE  II. 
ACCEPTANCE. 


Sec.  132.  Acceptance;  How  Made.  The  acceptance  of  a  bill  is  the 
signification  by  the  drawee  of  his  assent  to  the  order  of  the  drawer.  The 
acceptance  must  be  in  writing  and  signed  by  the  drawee.  It  must  not 
express  that  the  drawee  will  perform  his  promise  by  any  other  means 
than  the  payment  of  money.    For  Liability,  cf.  sec.  62. 

Sec.  133.  Holder  Entitled  to  Acceptance  on  Face  of  Bill.  The  holder 
of  a  bill  presenting  the  same  for  acceptance  may  require  that  the  accept- 
ance may  be  written  on  the  bill  and  if  such  request  is  refused,  may  treat 
the  bill  as  dishonored.    Cf.  sec,  post. 


NO.  108. 


No.. 


FORM  OF  ACCEPTANCE. 


McMASTER'S  COMMERCIAL  CASES. 
r907,  PAGE  a7A. 
87  PAC.  746. 


BVYTOTHE  ORDER  of  lli d^a.    (^'^b  vUcMt  (T^  ji^CUXtA.  

PLajul  Ut^urLx/A     '^^4^   D 0 LIARS 


Sec.  134.  Acceptance  by  Separate  Instrument.  Where  an  accept- 
ance is  written  on  a  paper  other  than  the  bill  itself,  it  does  not  bind  the 
acceptor  except  in  favor  of  a  person  to  whom  it  is  shown  and  who,  upon 
the  faith  thereof,  receives  the  bill  for  value. 

For  alteration  in  text,  Illinois  Rev.  Stat.  1909,  sec.  133;  South  Da- 
kota Laws  1913,  ch.  279,  sec.  133. 

Sec.  135.  Promise  to  Accept;  When  Equivalent  to  Acceptance.  An 
unconditional  promise  in  writing  to  accept  a  bill  before  it  is  drawn  is 
deemed  an  actual  acceptance  in  favor  of  every  person  who,  upon  the 
faith  thereof,  receives  the  bill  for  value. 

Sec.  136.  Time  Allowed  Drawee  to  Accept.  The  drawee  is  allowed 
twenty-four  hours  after  presentment  in  which  to  decide  whether  or  not 
he  will  accept  the  bill ;  but  the  acceptance  if  given  dates  as  of  the  day 
of  presentation. 

Sec.  137.  Liability  of  Drawee  Retaining  or  Destroying  Bill.  Where 


a  drawee  to  whom  a  bill  is  delivered  for  acceptance  destroys  the  same, 
or  refuses  within  twenty-four  hours  after  such  delivery,  or  within  such 
other  period  as  the  holder  may  allow,  to  return  the  bill  accepted  or  non- 
accepted  to  to  the  holder,  he  will  be  deemed  to  have  accepted  the  same, 
For  variation  in  text,  see  Illinois  Rev.  Stats.  1909,  section  omitted ; 
likewise  South  Dakota  Laws  1913,  ch.  279. 

Sec.  138.  Acceptance  of  Incomplete  Bill.  A  bill  may  be  accepted 
before  it  has  been  signed  by  the  drawer,  or  while  otherwise  incomplete, 
or  when  it  is  overdue,  or  after  it  has  been  dishonored  by  a  previous 
refusal  to  accept,  or  by  non-payment.  But  when  a  bill  payable  after 
sight  is  dishonored  by  non-acceptance  and  the  drawee  subsequently 
accepts  it,  the  holder,  in  the  absence  of  any  different  agreement,  is 
entitled  to  have  the  bill  accepted  as  of  the  date  of  the  first  presentment. 

Illinois  makes  two  sections  of  this  te.xt  and  varies  by  using  the 
word  "  payable  "  in  the  second  section  so  formed. 


Sec.  139.  Kinds  of  Acceptance.  An  acceptance  is  either  general  or 
qualified.  A  general  acceptance  assents  without  qualification  to  the 
order  of  the  drawer.  A  qualified  acceptance  in  express  terms  varies  the 
effect  of  the  bill  as  drawn. 

Sec.  140.  What  Constitutes  a  General  Acceptance.  An  acceptance 
to  pay  at  a  particular  place  is  a  general  acceptance  unless  it  expressly 
states  that  the  bill  is  to  be  paid  there  only  and  not  elsewhere. 

Sec.  141.  Qualified  Acceptance.  An  acceptance  is  qualified  which  is: 


1.  Conditional,  that  is  to  say,  which  makes  payment  by  the  acceptor 
dependent  on  the  fulfillment  of  a  condition  therein  stated: 

2.  Partial,  that  is  to  say,  an  acceptance  to  pay  part  only  of  the 
amount  for  which  the  bill  is  drawn ; 

3.  Local,  that  is  to  say,  an  acceptance  to  pay  only  at  a  particular 
place ; 

4.  Qualified  as  to  time; 

5.  The  acceptance  of  one  or  more  of  the  drawees,  but  not  of  all. 


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Sec.  142.  Eights  of  Parties  as  to  Qiulified  Acceptance.  The  holder 
may  refuse  to  take  a  qualified  acceptance,  and  if  he  does  not  obtain  an 
unqualified  acceptance,  he  may  treat  the  bill  as  dishonored  by  non- 
acceptance.  Where  a  qualified  acceptance  is  taken,  the  drawer  and 
indorsers  are  discharged  from  liability  on  the  bill,  unless  they  have 
expressly  or  impliedly  authorized  the  holder  to  take  a  qualified  accept- 
ance, or  subsequently  assent  thereto.  When  the  drawer  or  an  indorser 
receives  notice  of  a  qualified  acceptance,  he  must  within  a  reasonable 
time  express  his  dissent  to  the  holder,  or  he  will  be  deemed  to  have 
assented  thereto. 


NO.  no. 


ACCEPTANCE:  QUALIFIED: 
INDORSER. 


If  drawer  of  a  draft  is  entitled  to  an  unqualified 
ipiance  of  it.  If  the  holder  or  his  agent  takes 
palified  acceptance,  the  drawer  and  indorsers 
rtleased. 


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ARTICLE  III. 
PRESENTMENT  FOR  ACCEPTANCE. 


Sec.  143.  When  Presentment  for  Acceptance  Must  be  Made.  Pre- 
sentment for  acceptance  must  be  made : 

1.  When  the  bill  is  payable  after  sight,  or  in  any  other  case  where 
presentment  for  acceptance  is  necessary  in  order  to  fix  the  maturity  of 
the  instrument;  or 

2.  Where  the  bill  expressly  stipulates  that  it  shall  be  presented  for 
acceptance:  or 

3.  Where  the  bill  is  drawn  payable  elsewhere  than  at  the  residence 
or  place  of  business  of  the  drawee. 

In  no  other  case  is  presentment  for  acceptance  necessary  in  order 
to  render  any  party  to  the  bill  liable. 

Sec.  144.  When  Failure  to  Present  Releases  Drawer  and  Indorser. 

Except  as  herein  otherwise  provided,  the  holder  of  a  bill  which  is  re- 
quired by  the  next  preceding  section  to  be  presented  for  acceptance  must 
either  present  it  for  acceptance  or  negotiate  it  within  a  reasonable  time. 


If  he  fails  to  do  so,  the  drawer  and  all  indorsers  are  discharged.  Rea- 
sonable time,  cf.  sec.  193. 

Sec.  145.  Presentment;  How  Made.  Presentment  for  acceptance 
must  be  made  by  or  on  behalf  of  the  holder  at  a  reasonable  hour,  on  a 
business  day,  and  before  the  bill  is  overdue,  to  the  drawee  or  some 
person  authorized  to  accept  or  refuse  acceptance  on  his  behalf;  and 

1.  Where  a  bill  is  addressed  to  two  or  more  drawers  who  are  not 
partners,  presentment  must  be  made  to  them  all,  unless  one  has  authority 
to  accept  or  refuse  acceptance  for  all,  in  which  case  presentment  may 
be  made  to  him  only; 

2.  Where  the  drawee  is  dead,  presentment  may  me  made  to  his 
personal  representative ; 

3.  Where  the  drawee  has  been  adjudged  a  bankrupt  or  an  insolvent, 
or  has  made  an  assignment  for  the  benefit  of  creditors,  presentment  may 
be  made  to  him  or  to  his  trustee  or  assignee.    Cf.  sec.  72. 


Sec.  146.  On  What  Days  Presentment  May  be  Made.  A  bill  may  be 
presented  for  acceptance  on  any  day  on  which  negotiable  instruments 
may  be  presented  for  payment  under  the  provisions  of  sections  72  and 
85  of  this  Act.  When  Saturday  is  not  otherwise  a  holiday,  presentment 
for  acceptance  may  be  made  before  12  o'clock  noon  on  that  day. 

Sec.  147.  Presentment  When  Time  is  Insufficient.  Where  the  holder 
of  a  bill  drawn  elsewhere  than  at  the  place  of  business  or  the  residence 
of  the  drawee,  has  not  time  with  the  exercise  of  reasonable  diligence  to 
present  the  bill  for  acceptance  before  presenting  it  for  payment  on  the 
day  that  it  falls  due,  the  delay  caused  by  presenting  the  bill  for  accept- 
ance before  presenting  it  for  payment  is  excused  and  does  not  discharge 
the  drawers  and  indorsers. 

Sec.  148.  When  Presentment  is  Excused.    Presentment  for  accept- 


ance is  excused  and  a  bill  may  be  treated  as  dishonored  by  non-accept- 
ance in  either  of  the  following  cases: 

1.  Where  the  drawee  is  dead,  or  has  absconded,  or  is  a  fictitious 
person  or  a  person  not  having  capacity  to  contract  by  bill ; 

2.  Where,  after  the  excise  of  reasonable  diligence,  presentment 
cannot  be  made ; 

3.  Where,  although  presentment  has  been  irregular,  acceptance  has 
been  refused  on  some  other  ground.    Clause  2,  cf.  sec.  82. 

Sec.  149.  When  Dishonored  by  Non-Acceptance.  A  bill  is  dishon- 
ored by  non-acceptance. 

1.  When  it  is  duly  presented  for  acceptance,  and  such  an  acceptance 
as  is  prescribed  by  this  Act  is  refused  or  cannot  be  obtained ;  or 

2.  When  presentment  for  acceptance  is  excused  and  the  bill  is  not 
accepted. 


Sec.  150.  Duty  of  Holder  Where  Bill  is  not  Accepted.  Where  a  bill 
is  duly  presented  for  acceptance  and  is  not  accepted  within  the  pre- 
scribed time,  the  person  presenting  it  must  treat  the  bill  as  dishonored 
Ijy  non-acceptance  or  he  loses  the  right  of  recourse  against  the  drawer 
and  indorsers.    Prescribed  time,  cf.  sec.  136. 

Sec.  151.  Rights  of  Holder  Where  Bill  is  not  Accepted.  When  a 
bill  is  dishonored  by  non-acceptance,  an  immediate  right  of  recourse 
against  the  drawers  and  indorsers  accrues  to  the  holder  and  no  present- 
ment for  payment  is  necessary. 


Hid  s  sia;'"//   .balgsssA  Jon  31  liifl  sisiIW  isbloH  Jo  yJuQ  .oji  .oa2 
-9iq  aril  niriJiv^  baJqaaoE  Jon  8i  bns  sjnjjqsaoi:  lol  bajnaaaiq  i(lub  ai 
bsionorieib  e£  Hid  ariJ  JcaiJ  tzum  )i  gnijnae^iq  noaiaq  ariJ  .srniJ  baditoa 
19-H£ib  sriJ  JenisgiB  aaiuojai  io  JrisiT  srfj  ssso!  art  io  a3fiBJq3D3£-non  ^d 
.d{;i  .332  .Id  .smij  badiiDaai?    .aiaaiobni  bnc 

nsriV/    .bsJqssDA  jon  ei  Ilia  aiariW  labloH  lo  aJrigiH  .iji  .398 
3£iuoa3i  io  Jrlgi-;  5Sr.ibaiti.Tii  ns  .aansJqaaDB-noji  -{d  bsionodaifa  si  Hid 
■:naaaiq  on  btn>  jablori  arij  oJ  aamass  Eiaa-:i  bni  bn£  aiav/£-ib  arij  Janisgc 

.'Cij^?-=a3an  ai  Jnamvsq  lol  Jnam 


NO:  113A. 


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ARTICLE  IV. 
PROTEST. 


Sec.  152.  In  What  Cases  Protest  Necessary.  Where  a  foreign  bill 
appearing  on  its  face  to  be  such  is  dishonored  by  non-acceptance,  it 
must  be  duly  protested  for  non-acceptance,  and  where  such  a  bill  which 
has  not  been  previously  dishonored  by  non-acceptance,  is  dishonored 
by  non-payment,  it  must  be  duly  presented  for  non-payment.  If  it  is 
not  so  protested,  the  drawer  and  indorsers  are  discharged.  Where 
a  bill  does  not  appear  on  its  face  to  be  a  foreign  bill,  protest  thereof  in 
case  of  dishonor  is  unnecessary.    Cf.  sec.  118. 

See  Wisconsin  Laws  1906,  ch.  78,  sees.  1681-9. 

Sec.  153.  Protest,  How  Made.  The  protest  must  be  annexed  to  the 
bill,  or  must  contain  a  copy  thereof,  and  must  be  under  the  hand  and 
seal  of  the  notary  making  it,  and  must  specify: 

1.  The  time  and  place  of  presentment; 

2.  The  fact  that  presentment  was  made  and  the  manner  thereof; 

3.  The  cause  or  reason  for  protesting  the  bill ; 


4.  The  demand  made  and  the  answer  given,  if  any,  or  the  fact  that 
the  drawee  or  acceptor  could  not  be  found. 

Sec.  154.  Protest;  by  Whom  Made.   Protest  may  be  made  by: 

1.  A  notary  public;  or 

2.  By  any  respectable  resident  of  the  place  where  the  bill  is  dishon- 
ored in  the  presence  of  two  or  more  credible  witnesses. 

Sec.  155.  Protest;  When  to  be  Made.  When  a  bill  is  protested,  such 
protest  must  be  made  on  the  day  of  its  dishonor,  unless  delay  is  excused 
as  herein  provided.  When  a  bill  has  been  duly  noted,  the  protest  may 
be  subsequently  extended  as  of  the  date  of  the  noting. 

Sec.  156.  Protest;  Where  Made.  A  bill  must  be  protested  at  the 
place  where  it  is  dishonored,  except  that  when  a  bill  drawn  payable  at 
the  place  of  business  or  residence  of  some  persons  other  than  the  drawee, 
has  been  dishonored  by  non-acceptance,  it  must  be  protested  for  non- 


payment  at  the  place  where  it  is  expressed  to  be  payable,  and  no  further 
presentment  for  payment  to,  or  demand  on,  the  drawee  is  necessary. 

Sec.  157.  Protest  Both  for  Non-Acceptance  and  Non-Payment.  A 
bill  which  has  been  protested  for  non-acceptance  may  be  subsequently 
protested  for  non-payment. 

Sec.   158.  Protest  Before  Maturity  Where  Acceptor  Insolv^nt.g 
Where  the  acceptor  has  been  adjudged  a  bankrupt  or  an  insolvent  or 
has  made  an  assignment  for  the  benefit  of  creditors,  before  the  bill 
matures,  the  holder  may  cause  the  bill  to  be  protested  for  bafir'sei:iiri?)P 
against  the  drawer  and  indorsers. 


Sec.  159.  When  Protest  Dispensed  With.  Protest  is  dispensed  with 
by  any  circumstances  which  would  dispense  with  notice  of  dishonor. 
Delay  in  noting  or  protesting  is  excused  when  delay  is  caused  by  cir- 
cumstances beyond  the  control  of  the  holder  and  not  imputable  to  his 
default,  misconduct,  or  negligence.  When  the  cause  of  delay  ceases  to 
operate,  the  bill  must  be  noted  or  protested  with  reasonable  diligence. 

J3l'Be(!?.i6o.  Protest  Where  Bill  is  Lost.  Where  bill  is  lost  destroyed 
or  is  wrongly  detained  from  the  person  entitled  to  hold  it,  protest  may 
^be,g^e^QO  a-Ojpy  or  written  particulars  thereof. 


ARTICLE  V. 
ACCEPTANCE   FOR  HONOR. 


Sec.  l6i.  When  BiU  May  be  Accepted  for  Honor.  Where  a  bill  ot 
exchange  has  been  protested  for  dishonor  by  non-acceptance  or  pro- 
tested for  better  security  and  is  not  overdue,  any  person  not  being  a 
person  already  liable  thereon,  may,  with  the  consent  of  the  holder,  inter- 
vene and  accept  the  bill  supra  protest  for  the  honor  of  any  party  liable 
thereon  or  for  the  honor  of  the  person  for  whose  account  the  bill  is 
drawn.  The  acceptance  for  honor  may  be  for  part  only  of  the  sum  for 
which  the  bill  is  drawn ;  and  where  there  has  been  an  acceptance  for 
honor  for  one  party,  there  may  be  a  further  acceptance  by  a  different 
person  for  the  honor  of  another  party. 

Sec.  162.  Acceptance  for  Honor;  How  Made.  An  acceptance  for 
honor  supra  protest  must  be  in  writing  and  indicate  that  it  is  an  accept- 
ance for  honor,  and  must  be  signed  by  the  acceptor  for  honor. 

Sec.  163.  When  Deemed  to  be  an  Acceptance  for  Honor  of  the 
Drawer.   Where  an  acceptance  for  honor  does  not  expressly  state  for 


whose  honor  it  is  made,  it  is  deemed  to  be  an  acceptance  for  the  honor 
of  the  drawer. 

Sec.  164.  Liability  of  Acceptor  for  Honor.  The  acceptor  for  honor 
is  liable  to  the  holder  and  to  all  parties  to  the  bill  subsequent  to  the 
party  for  whose  honor  he  has  accepted. 

Sec.  165.  Agreement  of  Acceptor  for  Honor.  The  acceptor  for  honor 
by  such  acceptance  engages  that  he  will  on  due  presentation  pay  the  bill 
according  to  the  terms  of  his  acceptance,  provided  it  shall  not  have  been 
paid  by  the  drawee,  and  provided  also,  that  it  shall  have  been  duly  pre- 
sented for  payment  and  protested  for  non-payment  and  notice  of  dis- 
honor been  given  to  him. 

Sec.  166.  Maturity  of  Bill  Payable  After  Sight;  Accepted  for  Honor. 
Where  a  bill  payable  after  sight  is  accepted  for  honor,  its  maturity  is 
calculated  from  the  date  of  the  noting  for  non-acceptance  and  not  from 
the  date  of  the  acceptance  for  honor. 


Sec.  167.  Protest  of  Bill  Accepted  for  Honor  or  Containing  a  Refer- 
ence in  Case  of  Need.  Where  a  dishonorod  bill  has  been  accepted  for 
honor  supra  protest  or  contains  a  reference  in  case  of  need,  it  must  be 
protested  for  non-payment  before  it  is  presented  for  payment  to  the 
acceptor  for  honor  or  referee  in  case  of  need. 

Sec.  168.  Presentment  for  Payment  to  Acceptor  for  Honor;  How 
Made.  Presentment  for  payment  to  the  acceptor  for  honor  must  be 
made  as  follows: 

I.  If  it  is  to  be  presented  in  the  place  where  the  protest  for  non- 
payment was  made,  it  must  be  presented  not  later  than  the  day  follow- 
ing the  maturity; 


2.  If  it  is  to  be  presented  in  some  other  place  than  the  place  where 
it  was  protested,  then  it  must  be  forwarded  within  the  time  specified  in 
section  104, 

Sec.  169.  When  Delay  in  Making  Presentment  is  Excused.  The 

provisions  of  section  81  apply  where  there  is  delay  in  making  present- 
ment to  the  acceptor  for  honor  or  referee  in  case  of  need. 

Sec.  170.  Dishonor  of  Bill  by  Acceptor  for  Honor.  When  the  bill 
is  dishonored  by  the  acceptor  for  honor  it  must  be  protested  for  non- 
payment by  him. 


ARTICLE  VI. 
PAYMENT  FOR  HONOR. 


Sec.  171.  Who  May  Make  Payment  for  Honor.  Where  a  bill  has 
been  protested  for  non-payment,  any  person  may  intervene  and  pay  it 
supra  protest  for  the  honor  of  any  person  liable  thereon  or  for  the  honor 
of  the  person  for  whose  account  it  was  drawn. 

Sec.  172.  Payment  for  Honor;  How  Made.  The  payment  for  honor 
supra  protest  in  order  to  operate  as  such  and  not  as  a  mere  voluntary 
payment  must  be  attested  by  a  notarial  act  of  honor  which  may*  be: 
appended  to  the  protest  or  form  an  extension  of  it. 

Sec.  173.  Declaration  Before  Payment  for  Honor.  The  notarial  act 
of  honor  must  be  founded  on  a  declaration  made  by  the  payer  for  honor 
or  by  his  agent  in  that  behalf  declaring  his  intention  to  pay  the  bill  for 
honor  and  for  whose  honor  he  pays. 

Sec.  174.  Preference  of  Parties  Offering  to  Pay  for  Honor.  Where 
two  or  more  persons  offer  to  pay  a  bill  for  the  honor  of  different  parties, 
the  person  whose  payment  will  discharge  most  parties  to  the  bill  is  to 
be  given  the  preference.. 


Sec.  175.  Effect  on  Subsequent  Parties  Where  Bill  is  Paid  for  Honor. 

Where  a  bill  has  been  paid  for  honor  all  parties  subsequent  to  the  parties 
for  whose  honor  it  is  paid  are  discharged,  but  the  payer  for  honor  is 
subrogated  for,  and  succeeds  to,  both  the  rights  and  duties  of  the  holder 
as  regards  the  party  for  whose  honor  he  pays  and  all  parties  liable  to  the 
latter. 

Sec.  176.  Where  Holder  Refuses  to  Receive  Payment  Supra  Protest. 

Where  the  holder  of  a  bill  refuses  to  receive  payment  supra  protest,  he 
loses  his  right  of  recourse  against  any  party  who  would  have  been  dis- 
charged by  such  payment. 

Sec.  177.  Rights  of  Payer  for  Honor.  The  payer  for  honor  on  pay- 
ment to  the  holder  the  amount  of  the  bill  and  the  notarial  expenses  inci- 
dent to  its  dishonor,  is  entitled  to  receive  both  the  bill  itself  and  the 
protest. 


ARTICLE  VII. 

BILLS  IN  SETS. 


Sec.  178.  Bill  in  Sets  Constitute  One  Bill.  Where  a  bill  is  drawn 
in  a  set,  each  part  of  the  set  being  numbered  and  containing  a  reference 
to  the  other  parts,  the  whole  of  the  parts  constitutes  one  bill. 

Sec.  179.  Rights  of  Holder  vVhere  Different  Parts  are  Negotiated. 

Where  two  or  more  parts  of  a  set  are  negotiated  to  different  holders  in 
due  course,  the  holder  whose  title  first  accrues  is  as  between  such 
holders  the  true  owner  of  the  bill.  But  nothing  in  this  section  affects 
the  rights  of  a  person  who  in  due  course  accepts  or  pays  the  part  first 
presented  to  him. 

Sec.  180.  Liability  of  a  Holder  Who  Indorses  Two  or  More  Parts 
of  a  Set  to  Different  Persons.  Where  the  holder  of  a  set  indorses  two 
or  more  parts  to  different  persons  he  is  liable  on  every  such  part,  and 
every  indorser  subsequent  to  him  is  liable  on  the  part  he  has  himself 
indorsed,  as  if  such  parts  were  separate  bills. 


Sec.  181.  Acceptance  of  Bills  Drawn  in  Sets.  The  acceptance  may 
be  written  on  any  part  and  it  must  be  written  on  one  part  only.  If  the 
drawee  accepts  more  than  one  part,  and  such  accepted  parts  are  nogo- 
tiated  to  different  holders  in  due  course,  he  is  liable  on  every  such  part 
as  if  it  were  a  separate  bill. 

Sec.  182.  Payment  by  Acceptor  of  Bills  Drawn  in  Sets.  When  the 
acceptor  of  a  bill  drawn  in  a  set  pays  it  without  requiring  the  part  bear- 
ing his  acceptance  to  be  delivered  up  to  him,  and  that  part  at  maturity 
is  outstanding  in  the  hands  of  a  holder  in  due  course,  he  is  liable  to  the 
holder  thereon. 

Sec.  183.  Effect  of  Discharging  One  of  a  Set.  Except  as  herein  other- 
wise provided,  where  any  one  part  of  a  bill  drawn  in  a  set  is  discharged  by 
payment  or  otherwise  the  whole  bill  is  discharged. 


TITLE  111. 
ARTICLE  I. 
PROMISSORY  NOTES  AND  CHECKS. 


Sec.  184.  Promissory  Note  Defined.  A  negotiable  promissory  note 
within  the  meaning  of  this  Act  is  an  unconditional  promise  in  writing 
made  by  one  person  to  another  signed  by  the  maker  engaging  to  pay 
on  demand  or  at  a  fixed  or  determinable  future  time,  a  sum  certain  in 
money  to  order  or  to  bearer.  Where  a  note  is  drawn  to  the  maker's  own 
order,  it  is  not  complete  until  indorsed  by  him. 

Sec.  185.  Check  Defined.  A'check  is  a  bill  of  exchange  drawn  on 
a  bank  payable  on  demand.  Except  as  herein  otherwise  provided,  the 
provisions  of  this  Act  applicable  to  a  bill  of  exchange  payable  on  demand 
apply  to  a  check. 

Sec.  i86.  Within  What  Time  a  Check  Must  be  Presented.  A  check 
must  be  presented  for  payment  within  a  reasonable  time  after  the  issue 
or  the  drawer  will  be  discharged  from  liability  thereon  to  the  extent  of 
the  loss  caused  by  the  delay. 

See  Illinois  for  text  change,  Rev.  Stats.  1909,  sec.  184. 


Sec.  187.  Certification  of  Check;  Effect  of.  Where  a  check  is  certi- 
fied by  the  bank  on  which  it  is  drawn  the  certification  is  equivalent  to 
an  acceptance. 

Sec.  188.  Effect  Where  Holder  of  a  Check  Procures  It  to  be  Certi- 
fied. Where  the  holder  of  a  check  procures  it  to  be  accepted  or  certified 
the  drawer  and  all  indorsers  are  discharged  from  liability  thereon. 

Sec.  189.  When  Check  Operates  as  an  Assignment.  A  check  of 
itself  does  not  operate  as  an  assignment  of  any  part  of  the  funds  to  the 
credit  of  the  drawer  with  the  bank,  and  the  bank  is  not  liable  to  the 
holder,  unlesS  and  until  it  accepts  or  certifies  the  check. 

See  California  Laws  1905,  ch.  258;  Michigan  Laws  1907,  ch.  95; 
Montana  Laws  1905,  ch.  78;  New  York  Laws  1904,  ch.  287;  Oregon 
Laws  1907,  ch.  138;  Washington  Laws  1907,  ch.  27;  Wisconsin  Laws 
1915,  ch.  262.   Sec.  1676-24. 


TITLE  IV. 
GENERAL  PROVISIONS. 
ARTICLE  I. 


Sec.  1S4.  Promissory  Note  Defined.  A  negotiable  promissory  note 
within  the  meaning  of  this  Act  is  an  unconditional  promise  in  writing 
made  by  one  person  to  another  signed  by  the  maker  engaging  to  pay 
on  demand  or  at  a  fixed  or  determinable  future  time,  a  sum  certain  in 
money  to  order  or  to  bearer.  Where  a  note  is  drawn  to  the  maker's  own 
order,  it  is  not  complete  until  indorsed  by  him. 

Sec.  185.  Check  Defined.  A'check  is  a  bill  of  exchange  drawn  on 
a  bank  payable  on  demand.  Except  as  herein  otherwise  provided,  the 
provisions  of  this  Act  applicable  to  a  bill  of  exchange  payable  on  demand 
apply  to  a  check. 

Sec.  186.  Within  What  Time  a  Check  Must  be  Presented.   A  check 
must  be  presented  for  payment  within  a  reasonable  time  after  the  issue 
or  the  drawer  will  be  discharged  from  liability  thereon  to  the  extent  of 
the  loss  caused  by  the  delay- 
See  Illinois  for  text  change.  Rev.  Stats.  1909,  sec.  184. 


Sec.  187.  Certification  of  Check;  Effect  of.  Where  a  check  is  certi- 
fied by  the  bank  on  which  it  is  drawn  the  certification  is  equivalent  to 
an  acceptance. 

Sec.  188.  Effect  Where  Holder  of  a  Check  Procures  It  to  be  Certi- 
fied. Where  the  holder  of  a  check  procures  it  to  be  accepted  or  certified 
the  drawer  and  all  indorsers  are  discharged  from  liability  thereon. 

Sec.  189.  When  Check  Operates  as  an  Assignment.  A  check  of 
itself  does  not  operate  as  an  assignment  of  any  part  of  the  funds  to  the 
credit  of  the  drawer  with  the  bank,  and  the  bank  is  not  liable  to  the 
holder,  unless  and  until  it  accepts  or  certifies  the  check. 

See  California  Laws  1905,  ch.  258;  Michigan  Laws  1907,  ch.  95; 
Montana  Laws  1905.  ch.  78;  New  York  Laws  1904,  ch.  287;  Oregon 
Laws  1907.  ch.  138:  Washington  Laws  1907,  ch.  27;  Wisconsin  Laws 
1915,  ch.  262.    Sec.  1676-24. 


TITLE  IV. 
GENERAL  PROVISIONS. 
ARTICLE  I. 


Sec.  190.  Short  Title.  This  Act  shall  be  known  as  the  Negotiable 
Instruments  Law. 

Sec.  191.  Definitions  and  Meaning  of  Terms.  In  this  Act  unless  the 
context  otherwise  requires: 

"Acceptance"  means  an  acceptance  completed  by  delivery  or  notifi- 
cation. 

"Action  "  includes  counter-claim  and  set-off. 

"  Bank  "  includes  any  person  or  association  of  persons  carrying  on 
the  business  of  banking,  whether  incorporated  or  not. 

"  Bearer  "  means  the  person  in  possession  of  a  bill  or  note  which  is 
payable  to  bearer. 

"  Bill  "  means  bill  of  exchange,  and  "note  "  means  negotiable  prom- 
issory note. 

"  Delivery  "  means  transfer  of  possession,  actual  or  constructive, 
from  one  person  to  another. 

"  Holder  "  means  the  payee  or  indorsee  of  a  bill  or  note,  who  is  in 
possession  of  it,  or  the  bearer  thereof. 

"  Indorsement  "  means  an  indorsement  completed  by  delivery. 

"  Instrument  "  means  negotiable  instrument. 


"  Issue  "  means  the  first  delivery  of  the  instrument,  complete  in 
form,  to  a  person  who  takes  it  as  a  holder. 

"  Person  "  includes  a  body  of  persons,  whether  incorporated  or  not. 

"  Value  "  means  valuable  consideration. 

"  Written  "  includes  printed,  and  "  writing  "  includes  print. 

Sec.  193.  Reasonable  Time,  What  Constitutes.  In  determining  what 
is  "  reasonable  time  "  or  an  "  unreasonable  time  "  regard  is  to  be  had  to 
the  nature  of  the  instrument,  the  usage  of  trade  or  business  (if  any)  with 
respect  to  such  instruments,  and  the  facts  of  the  particular  case. 

Sec.  194.  Time,  How  Computed;  When  Last  Day  Falls  on  Holiday. 
Where  the  day  or  the  last  day  for  doing  an  act  herein  required  or  per- 
mitted to  be  done  falls  on  Sunday  or  on  a  holiday,  the  act  may  be  done 
on  the  next  succeeding  secular  or  business  day. 

Sec.  195.  Application  of  Chapter.  The  provisions  of  this  act  do 
nott  apply  to  negotiable  instruments  made  and  delivered  prior  to  the 
passage  hereof. 

Sec.  196.  Law  Merchant,  When  Governs.  In  any  case  not  provided. 


The  following  are  Illustrations  of  Instruments  Declared 
Irregular,  Non-Negotiable,  or  Void,  by  the  Highest  Courts 
of  the  several  States. 


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^eceboed,  subject  to  the  classification  in  effect  on  the  date  of  issue  of 
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unknown),  marked,  consigned  and  destined  as  indicated  below,  which  said 
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MARKS: 

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DESCRIPTION  OF  ARTICLES. 

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NO.  117. 

SUNDAY  CONTRACT. 


le  made  and  dated  on  Sunday,  held  to  be  col- 
lible  if  the  purchaser  cashed  check  given  that 
ior  It,  but  not  presented  for  payment  until  9 
Kequent  day. 


McMASTER'S  COMMERCIAL  DIGEST, 
PAGE  493A. 
44  ATU.  REP.  S60. 


^^^^^^ 


NO.  118. 
SURETY:  GUARANTY. 


kny  security  given  by  the  principal  lo  one  of 
[tral  sureties,  is  for  the  benefit  of  all. 
Ii  is  beyond  the  power  of  the  debtor  or  one  cred- 
3  change  this  rule. 


MCMAVTER'S  COMMERCIAL  DIQEST, 

PAGE  laeA: 

48  8.  W.  REP.  291 


yen  I  h.ansaTic(. 


NO.  119. 
HECK  MADE  BY  INSANE  DEPOSITOR. 


:heck  made  by  insane  depositors  said  to  be  void 
ihe  option  of  the  insane  person's  estate,  even 
banlc  could  not  have  known  of  the  insanity. 


MeMAsnn's  commercial  digest, 

PAGE  1 1 8  A  ; 
»S.  E.  REP.  lea;    49  MICH.  192;    83  ME.  48t 


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NO.  123. 
NON-NEGOTIABLE  NOTE. 


lote  not  yet  dne — bo.  which  belonged  to  a  set 
of  which  was  past  due — was  held  to  be  taken 
|ect  to  the  oSsets  and  defences  of  the  ciaber 


MOMABTCR'S  COMMERCIAL  OIQUT. 
PAGE  T4A; 
«S  S.  W.  REP.  1068. 


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NO.  126. 


CERTIFICATE  OF  DEPOSIT: 
TWO  PAYEES:   DEATH  OF  ONE. 


MeMASTER'S  COMMERCIAL  DIGEST 
PAGE  61  3 a; 

ea  MD.  Bi 


Hi 


Second J^cttional  '3a7ilC 

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payable  fixe  artter  h'l  mscif  or  JEiien  nes  on  yehim  fhts, 
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NO.  128. 


DEPOSIT: 
RIGHT  TO  RESCIND  CREDIT. 


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NO.  129. 


SEAL. 


A  Dote  formally  Issued  under  seal,  held  not  to  be 
legotlable  iostnimeoc. 


VOL.  1.  HCMASTER-S  REVERSED  CASES. 

DEC  NO.  B1 3- 


■V-tV  fltxXjUy/-^  Co 


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NO.  130. 


PROTEST:  NOTICE. 


Each  indorser  bound,  under  eommon  iaw  rule. 
see  that  prior  indorser  is  notified  of  nonpayment ; 
^  creditor  may  only  notify  such  indorsers  as  he 
«ose5  to  hold. 


NO.  131. 

USURY:  BANKS: 
ACCOMMODATION  INDORSER. 


1  some  stales  the  taking  of  more  than  lega. 
irest  by  a  bank  is  held  to  entirely  release  accom- 
ditlon  indorsers. 


ISaA,  VOL.  1.  MCMASTEH'S  REVERSED  C»8ia 
118  ALA.  441 . 


(1)     IB  7! 


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NO.  132. 

JTRUMENTS  PAYABLE  "IN  CURRENT 
FUNDS"  NON-NECOTIABLE. 


Certificate  Ueposzt 


vSe  veaiee  n  Jfim^Cr  ccL 

Ororc(cV.anYeTli>-ii  a)  this  Ceftificafe^rafierly  In^orSCiZ 


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NO.  136. 

tFERENCE  ON  NOTE  TO  MORTGAGE 
GIVEN  TO  SEGUBE  IT:  NON-NEGOTIA- 
BLE CLAUSES  IN  MORTGAGE  HELD  TO 
PRE.IUDICE  NEGOTIABILITY  OF  NOTE. 


60  A,  VOL,  Z,  MCMABTER9  REyERBED  CASES. 


66> 


NO.  137. 

ATTACHING  COLLATERAL  HELD  IN 
PLEOCE-WAIVER  OP  PLEDGE. 


14A.  VOL.  2, 
McMASTER'S  REVERSED  CASES, 


NO.  139. 

ISHIER'S  CHECK:    RICHT  OF  ORIGINAL  yj 
PAYEE  TO  STOP  PAYMENT  FOR 

FRAUD  IN  TRANSFER.  ^ 

or 

UJ 


1ISikVOI-2  McMASTER-B  nCVERSEO  CA8C3. 


tSt'yf^/^'^ri/^  _  


^7oo^    


Cashier- 


618 


obblos,  who  made  this  guaranty,  and  who  lived 
distant  city,  died  soon  after  signing  it,  and 
his  death  Jordan,  Marsh  &  Co.,  who  were 
jrant  of  bis  death,  sold  goods  to  Moore.  It 
held  that  the  guaranty  could  not  be  enforced, 
ough  no  notice,  as  required  in  the  guaranty, 
beea  given  Jordan,  Marsh  &  Co, 


the  receipt  whereof  is  hereby  acknowledged,  the  undersigned  does  hereby 
guaranty  to  Jordan,  Marsh  &  Co.  the  prompt  payment  by  George  E.  Moore  to  Jordan,  Marsh  &  Co.,  on  maturity,  of 
all  sums  of  money  and  debts  which  he  may  hereafter  owe  Jordan,  Marsh  &  Co.  for  merchandise,  which  they  may  from 
time  to  time  sell  to  him,  whether  such  debts  be  on  book  account,  by  note,  draft  or  otherwise,  and  also  any  and  all 
renewals  of  any  such  debt.  The  undersigned  shall  not  be  compelled  to  pay  on  this  guaranty  a  sum  exceeding  $i,ooo, 
but  this  guaranty  shall  be  a  continuing  guaranty,  and  apply  to  and  be  available  to  said  Jordan,  Marsh  &  Co.,  for  all 
sales  of  merchandise  they  may  make  to  said  George  E.  Moore,  until  wrilten  notice  shall  have  been  given  by  the  undersigned 
to  said  Jordan,  Marsh  &•  Co.  and  received  by  them,  that  it  shall  not  apply  at  future  purchases.  Notice  of  the  acceptance 
of  this  guaranty  aud  of  sales  under  the  same,  and  demand  upon  said  George  E.  Moore  for  payment,  and  notice  to  me 
of  non-payment,  is  hereby  waived. 


^^ittlCSS  my  hand,  seal,  this  20th  day  June,  1879. 


WILLIAM  DOBBINS. 


S(«l. 


GUARANTY. 


Immediately  after  receiving  this  guaranty,  Reid, 
M.  &  F.  commenced  selling  goods  to  Mrs.  Zucker- 
maii,  'and  the  account  continued  to  grow  until  Nov. 
24.  1SS7,  when  she  failed.  No  notice  was  given  the 
t^uarantors  of  her  defaults  until  15  days  after  her 
ailure.  This  lack  of  notice  released  the  guarantors. 


McMASTER  S  COMMERCIAL  DIGEST 
PAGE  48  A- 


sn 


TReib,  ^IDurbock  Si  jFisber,  Chicago. 

Chicago,  January  t4,  1887. 

I  hereby  guarantee  the  prompt  payment  at  maturity  of  any  indebted- 
ness owing  to  Reid,  Murdock  &  Fisher  by  Mrs.  Mathilde  Zuckerman,  of  370  State  Street  and  214  and  216  North 
Clark  Street,  Chicago,  for  goods  purciiased,  or  which  may  be  purchased  hereafter  of  them,  to  the  amount  of 
fifteen  hundred  dollars  ($1,500.00),  with  interest  on  all  the  above  indebtedness,  according  to  the  tenor  and  effect 
thereof,  at  the  rate  of  eight  per  cent,  per  annum,  and  I  agree  to  pay  all  costs  or  expenses  paid  or  incurred  in 
collecting  the  same. 

"Signed  at  Chicago,  this  14th  day  of  January,  1887. 

''■smitneBs:  THOs.  Johnson/'  COHR 

WM.  TAGGERT. 


GUARANTY. 


)n  the  strength  of  this  guaranty,  Webb  bought 
ooo  worth  of  goods  of  Carson,  Pirie,  Scott  & 
and  did  not  pay  for  them.  The  guaranty 
lid  not  be  enforced.  Neither  the  cashier  or  all 
ihe  directors  could  bind  a  bank  as  guarantor  for 
lird  party. 


Cherryvale,    January  2nd,  1898. 

CARSON,  PIRIE,   SCOTT  &  CO.  ,    Chicago,  111.! 

GENTLEMEN — We  will  guaranty  the  payment  of  any  bill  of  goods  which 
Mr.  R.  T.  Webb  may  buy  of  you  while  in  Chicago  during  the  present  week.  If 
this  guaranty  is  not  specific  enough  we  will  make   it  satisfactory  to  you. 

Yours  very  truly, 

THE  CHERRYVALE  NATIONAL  BANK, 

B.  W.  WARD, 

Cashier. 


The  E.  P.  Dodge  Co.  sold  goods  to  Hill  after 
receiving  tiiis  guaranty.  Tile  court  lield  tiiat  tite 
guaranty  was  to  cover  goods  consigned, —  not  Wfl". 

The  guarantor  couid  not  be  tield. 


^11  C^OttSidCtntiOlI  of  goods,  wares,  and  merchandise  which  may  hereafter  be  consigned,  shipped, 
and  delivered  by  E.  P.  Dodge  Mfg.  Co.  to  George  E.  Hilt,  of  Dallas,  Texas,  as  agent  of  the  E.  P.  Dodge  Mfg. 
Co.,  upon  such  terms  as  may  be  agreed  upon  between  the  said  E.  P.  Dodge  Mfg.  Co.  and  the  said  Adam  Schuab, 
do  hereby  guaranty  that  said. George  E.  Hilt  will  hold  and  dispose  of  and  account  to  said  E.  P.  Dodge  Mfg.  Co. 
for  all  goods,  wares,  and  merchandise  as  the  said  E.  P.  Dodge  Mfg.  Co.  may  hereafter  consign,  ship  and  deliver  to 
and  require  of  the  said  George  E.  Hilt  to  hold,  dispose  of,  and  account  for  within  twelve  months  after  date  of 
this  instrument  in  strict  accordance  with  the  terms  and  agreement  which  may  be  entered  into  and  agreed  upon 
between  said  E.  P.  Dodge  Mfg.  Co.,  of  the  value  not  to  exceed,  however,  five  hundred  dollars,  of  all  goods, 
wares,  and  merchandise  that  may  hereafter  be  consigned,  shipped  and  delivered,  by  said  E.  P.  Dodge  Mfg.  Co. 
to  the  said  George  E.  Hilt,  to  be  held,  disposed  of,  and  accounted  for  to  the  said  E.  P.  Dodge  Mfg.  Co.  by  the 
said  George  E.  Hilt  within  twelve  months  after  this  date. 


Dallas,  Texas,  Jan.  9,  1898. 


ADAM  SCHUAB. 


Surety  released  for  the  so}e  reason  that  the  duties 
,  clerk  who  was  employed  as  bookkeeper  and 
Hector  were  also  made  to  include  that  of  cashier. 


«4  «▼  BEP 


5Cbc  Supreme  Court  of  fl5(cbigan  sa?,  tn  action  against  the  CSuarantor 
in  this  dase: 

"  MOORE,  J.  March  20,  1890,  the  plaintiff  made  a  contract  with  defendant  Rogers  to  sell  him  'all  the  lager  beer 
he  may  need  m  car  Iciis,  at  five  dollars  per  barrel,  delivered  on  board  of  tne  cars  at  the  city  of  Toledo,  at  the  rate  and 
price  of  five  dollars  per  barrel.'  Rogers,  on  his  part,  agreed  to  use  his  best  endeavors  to  market  the  beer,  '  and  that  he 
will  pay  for  the  beer  so  delivered,  in  car  lots,  by  remittance  or  honoring  and  paying  drafts  drawn  on  him  therefor,  in 
such  manner  that  he  *  *  *  shall  not  be  indebted  to  said  Crasser  and  Brand  Brewing  Company  at  any  one  time  for 
more  than  the  oiice  of  one  lot  or  shipment;  that  is  to  say,  that,  upon  making  any  order  for  beer,  he  will  remit  or  honor 
and  pay  the  sight  draft  drawn  on  him  to  the  full  amount  of  all  indebtedness  then  existing.'  Defendant  Doherty  became 
surely  for  the  performance  of  this  contract  on  the  part  of  Rogers,  limiting  the  amount  for  which  he  would  be  liable  to  $t,ooo. 
Two  days  after  this  contract  was  made,  one  car  load  (^i  beer,  consisting  of  250  quarter  barrels,  was  shipped  to  Rogers. 
This  was  the  only  car-load  lot  shipped.  Other  beer  was  shipped  to  Rogers  in  smaller  quantities  than  car-load  lots,  as 
ordered  by  him.  The  value  of  all  the  beer  shipped  him  was  $910.50.  He  made  remittances,  which  were  credited  upon 
his  account,  amounting  to  $517.14,  leaving  a  balance  due  to  plaintiff  from  Rogers  of  $393-3^.  for  which  amount  the  suit 
was  brought.  It  was  shown  that,  if  beer  was  shipped  in  smaller  quantities  than  car  lots,  the  freight  was  proportionately 
much  higher.  Defendant  Doherty  claimed  that  he  was  liable  onlv  for  the  beer  sold  in  car-load  lots,  and  that,  as  the 
remittances  would  more  than  pay  for  the  car  load  that  was  shipped,  he  was  not  liable.  The  judge  sustained  the 
defendant  in  both  positions,  and  the  guaranty  was  held  worthless." 


GUARANTY. 


Guarantor  of  purchases  of  beer  in  car-load  lots, 
held  released  for  the  reason  that  the  beer  was  deliv- 
ered in  less  than  car-load  lots. 


MCMASTER'S  COMMERCIAL  DIGEST. 
TO  N    w    REP  4«5 


TRosanna  j6.  Iftsb  Slgneft  a  Bonft,  tbe  fiDatertal  part  of  wbtcb  rea&s  as 

follow© : 

"WHEREAS,  the  above  bounden  Frank  M.  Scott,  is  about  to  act  as  bookkeeper  and  collector  for  the  above- 
named  Andrew  H.  Kellogg,  and  by  reason  thereof  will  have  the  control  of  sums  of  money,  and  be  required  to 
perform  various  acts :  Now,  the  condition  of  this  obligation  is  that  if  the  above-bounden.  Frank  M.  Scott  shall 
well  and  truly  account  for  and  pay  over  and  dispose  of  all  moneys  and  property  of  the  said  Andrew  H.  Kellogg 
which  may  come  into  his  possession  or  under  his  control,  and  shall  well  and  truly  discharge  and  perform  all  his 
duties  as  such  bookkeeper  and  collector,  and  if  the  said  obligors,  or  either  of  them,  shall  pay  over  to  the  said  Andrew 
H.  Kellogg  the  sum  and  amount  of  any  and  all  loss,  damages,  costs,  and  expenses  suffered  or  incurred  by  the  said 
Andrew  H.  Kellogg  by  reason  of  the  failure  of  said  Frank  M.  Scott  to  pay  over  and  account  for  all  moneys  and 
property,  or  his  failure  to  discharge  and  perform  all  his  duties  as  aforesaid,  within  ten  days  after  notice  is  given  to 
the  said  Rosanna  E.  Fish  of  the  sum  and  amount  so  to  be  paid,  then  this  obligation  to  be  void,"  etc. 

Scott  entered  on  his  duties  and  soon  after  he  was  given  the  additional  duties  of  cashier.  He  defaulted,  but 
this  bond  could  not  be  enforced  on  account  of  the  addition  to  his  duties. 


GUARANTY. 


Guaranty  broadly  drawn  to  cover  any  indebted- 
ness of  T,,  did  not  cover  paper  of  firm  of  which  T. 
was  member,  although  paper  was  signed  by  T.  in 
the  firm  name. 


MeMASTER'S  COMMERCIAL  DIGEST 

PAGE  =8  a: 

12t  N.  Y.  280 


John  Thompson,  a  customer  of  the  Bank  of 
own  name.     To  secxire  the  bank  of  — 


— ,  was  carrying  on  mercantile  business  in  his 
for  any  indebtedness  they  might  have  against 
him,  he  made  a  mortgage  on  real  estate  conditioned  as  follows: 

"  Provided  always,  and  these  presents  are  upon  this  express  condition,  that  if  the  said  Thompson,  his  heirs, 

executors  or  administrators  shall  and  do  well  and  truly  pay  or  cause  to  be  paid  unto  the  said  Bank  of   or 

its  assi<^ns  the  just  and  full  sum  of  all  promissory  notes,  checks,  or  bills  of  exchange  which  have  been  or  shall  at 
any  time  hereafter  be  made,  drawn,  indorsed  or  accepted  by  the  said  Thompson  and  which  have  been  or  shall  at 
any  time  be  discounted  by  the  said  bank  for  his  benefit,  when  and  as  the  same  shall  become  due  and  payable,  and 
shall  also  pay  upon  demand  any  and  all  overdrafts  made  by  him  and  all  balances  of  account,  and  all  sums  of 
money  which  now  are  or  shall  at  any  time  become  due  or  owing  by  him  to  said  bank  upon  any  account  whatever, 
j  this  conveyance  shall  be  void,  otherwise  to  remain  in  full  force  and  virtue.  This  mortgage  being  given  and 
intended  as  a  collateral  and  continuing  security  for  the  payment  of  such  indebtedness  to  the  amount  of  S/S'OOO.' 
Thompson  continued  to  deal  with  the  bank  for  some  time.  He  then  organized  the  firm  of  Thompson,  Reynolds 
&  Co.,  who  kept  their  account  at  the  same  bank.  The  bank  held  paper  of  the  firm  signed  by  Thompson  in  the 
firm  name,  but  it  was  decided  that  this  mortgage  would  not  cover  it. 


Certain  guaranty  given  to  a  firm,  held  to  be 
inoperative  to  succeeding  partner. 


The  Fillmore  County  Bank  was  the  depositary  of  the  funds  of  Fillmore  County,  Minnesota, 
and,  as  such  depositary,  gave  a  bond  for  $10,000  with  several  sureties. 

The  bank  failed  to  pay  over  all  of  the  funds  belonging  to  the  county  and  the  sureties  were  sued  on  the  bond. 

On  the  trial  it  was  conclusively  established  that  when  the  sureties  executed  and  delivered  the  bond  its  condition 
was  (stating  it  according  to  its  legal  effect)  that  the  principals  would  pay  interest  on  all  public  money  deposited  with 
them  at  the  rate  of  3  per  cent,  per  annum  upon  the  monthly  balances  of  such  deposits.  But  after  the  delivery  of  the 
bond  by  the  sureties,  and  without  their  knowledge  or  consent,  Todd,  one  of  the  principals,  with  the  consent  of  the 
county  commissioners,  changed  the  condition  of  the  bond  so  as  to  make  the  rate  of  interest  2  per  cent,  per  annum 
instead  of  3.    The  sureties  could  not  be  held. 

The  court  said  in  part : 

"The  plaintiff  further  claims  that  the  alteration  in  the  terms  of  the  bond  was  not  material  because  it  reduced  the 
rate  of  interest;  hence  it  was  not  prejudicial  to  the  sureties.  It  is  unnecessary  to  inquire  or  speculate  whether  the 
alteration  was  prejudicial  to  the  sureties  or  not,  for  the  bond,  after  it  was  materially  altered  without  their  consent,  was 
no  longer  their  bond.  Its  identity  was  destroyed  by  the  alteration.  It  is  clear,  upon  principle  and  authority,  that  if  a 
material  alteration  is  made  in  a  contract  without  the  surety's  consent  he  is  discharged,  even  if  the  alteration  may  have  been 
for  his  benefit" 


GUARANTY. 


Extension  oi  ti 
obtained  on  guar 
although  the  gua 
notes  guaranteed. 


ne   of  paymen 
meed  note  released  gu 
anty  allowed  renewals 


of  judgment 
of  ih: 


Daniel  J.  Townsend  was  indebted  to  Oliver,  Lee  &  Co/s  Bank  at  Buffalo,  and  at  the  request  of  the 
bank  the  wife  of  Townsend  executed  a  mortgage  on  property  of  hers,  conditioned:  — 

"To  pay  or  cause  to  be  paid  all  checks,  notes,  drafts,  overdrafts  and  acceptances,  and  all  indebtedness  of  any  kind 
whatsoever,  which  had  theretofore  or  should  thereafter  be  incurred  by  the  said  Townsend,  or  Buffalo  Car  Co.,  and  which 
then  were  or  might  thereafter  be  held  or  owned  by  the  bank,  upon  which  the  said  Daniel  J.  Townsend  or  the  said  Buffalo 
Car  Co.  should  be  in  any  manner  liable  either  directly  or  contingently,  either  as  drawer,  maker,  indorser,  acceptor  or 
otherwise,  whenever  the  same  or  ariy  renewals  thereof  or  any  part  thereof  should  fall  due  or  become  payable,  with  all 
costs  and  expenses  thereof  or  in  anywise  connected  therewith." 

The  bank  afterwards  obtained  judgment  on  indebtedness  which  the  mortgage  was  given  to  secure,  against  Townsend, 
in  the  sum  of  $87,000.  After  the  recovery  of  the  judgment  the  bank  agreed  to  extend  the  time  of  payment  of  the  debt  to 
the  first  day  of  June  next,  and  Townsend  personally  consented  to  the  extension,  but  his  wife  was  not  asked  to.  It  sub- 
sequently transpired  that  a  portion  of  the  land  mortgaged  was  deeded  to  the  wife.  The  mortgage  as  drawn  was 
sufficient  to  bind  her  property  as  security  for  the  debt,  but  the  extension  of  time  without  her  consent  released  it. 

This  decision  negatives  the  idea  that  extension  of  time  is  equivalent  to  renewal,  as  the  mortgage  expressly  provided 
that  renewals  could  be  made. 


GUARANTY. 


Certain  guaranty  of  dividends  held, 
aot  to  snrvive  the  benficiary. 


MCMASTER-S  COMMERCIAL  DIGEST, 
PAGE  66S  a; 
17^  M*SS.  '25. 


Chicagop  January  f,  J  886, 

"  We  hereby  guaranty  the  payment  to  Mr.  William  J.  Rotch  of  a  dividend  of  6  per  cent,  per  annum  on 
stock  subscribed  to  this  day  in  the  corporation  of  French,  Potter  &  Wilson." 

T,  J.  FRENCH. 
VM.  POTTER. 
L.  D.  WILSON. 

This  guaranty  was  given  to  induce  Rotch  to  take  the  above  stock.  The  dividends  were  regularly  paid  until 
the  death  of  Rotch,  when  they  ceased.  The  executor  of  Rotch 's  estate  then  brought  an  action  on  the  guaranty 
and  succeeded  in  the  lower  court,  but  on  appeal  to  the  Supreme  Judicial  Court  of  Massachusetts  it  was  decided 
that  the  guaranty  was  to  be  construed  at  the  longest  as  running  for  a  reasonable  time,  and  that  whether  for  a 
longer  or  a  shorter  time,  it  would  in  no  event,  as  worded,  survive  the  death  of  the  beneficiary. 

"The  promise  guaranties  a  payment  'to  Mr.  William  J.  Rotch,' personally,  without  mention  of  executors, 
administrators  or  assigns.  It  guaranties  no  more  in  terms.  A  promise  to  pay  a  like  sum  annually  to  Rotch  or 
Seabury  would  be  limited  to  payments  during  their  lives." 

If  the  guaranty  was  intended  to  have  survived  Rotch  it  should  have  run  to  him,  " /lis  heirs,  executors, 
administrators  and  assigns." 


Guarantors  releai 
alteration  of  bond. 


ed  by  reducing  their  liability  i 


j  Anamosa,  Iowa,  May  25,  1894» " 

j  "  I  hereby  agree  to  be  security  to  Shaw  &  Schoonover  for  whatever  sum  of  money  they  or  may  hereafter  let 

)   my  sons,  Osborne  Brothers,  have  to  use  in  their  business. 

!  "DAVID  OSBORNE." 

Shaw  &  Schoonover,  bankers,  dissolved  partnership  some  time  after  receiving  this  guaranty.  Osborne  Bros, 
then  owed  them  $16,000.  Schoonover  succeeded  to  the  banking  business  and  continued  the  account  with 
Osborne  Bros,  until  they  owed  him  $34,000,  when  they  failed. 

Schoonover  sued  David  Osborne  on  his  guaranty,  seeking  to  charge  him  with  the  full  debt  of  Osborne  Bros., 
about  $34,000,  and  he  succeeded  in  his  action  in  the  lower  courts.  But  on  appeal  it  was  held  that  the  letter  of  the 
guaranty  would  not  cover  advances  made  by  Schoonover  after  the  withdrawal  of  his  partner  from  the  firm.  As  to 
the  balance  that  was  due  at  the  time  of  the  dissolution  of  the  firm,  $16,585.85,  and  which  was  fully  covered  by 
the  guaranty,  it  was  held  to  have  been  paid,  in  law,  by  the  credits  subsequently  made  to  the  account,  although  the 
subsequent  debits  to  the  account  equalled  or  exceeded  the  subsequent  credits;  the  rule  being  that  in  the  absence 
of  specific  instructions  as  to  the  application  of  credits,  the  credits  apply  to  and  extinguish  the  oldest  items  in  the 
account.  The  guaranty  of  David  Osborne  was  held  to  be  of  no  effect  in  the  hands  of  Schoonover.  The  opinion 
discusses  at  length  decisions  in  similar  cases  in  the  U.  S.  Supreme  Court  and  in  the  courts  of  other  States. 


Guaranty  of  paper  made  "  from  date  hereof  "  - 
(Jan.  17),  did  not  cover  paper  made  on  that  date. 


McMASTCR'S  COMMERCIAL  DIGEST, 
PAGE  66  a; 
45  NO.  E.  REP.  1083. 


Peoria,  ML,  January  17,  f893/ 

Eo  the  IPeoria  Savinge,  !lLoan  anb  ^rust  Companip: 

"Gentlemen — We  make  this  request  and  guaranty,  to  viz  :  That  the  Peoria  Pump  and  Implement  Co.,  of  this 
city  (incorporated),  may  from  time  to  time,  from  date  hereof  \xx^\\\  further  notice,  present  to  you  its  promissory  notes  and 
business  paper  for  discount  or  advance,  to  the  extent  of  $12,000.00,  In  case  that  it  shall  do  so,  we  request  to  discount 
such  notes  or  said  paper  indorsed  by  them,  or  to  make  such  advance  to  them,  and  in  consideration  of  the  terms,  and  one 
dollar  to  us  in  hand  paid  by  you,  the  receipt  of  which  is  hereby  acknowledged,  we  hereby  guarantee  the  prompt  pay- 
ment at  maturity  of  the  principal  and  interest  of  all  promissory  notes  and  business  paper  or  open  account  made  or 
indorsed  by  said  Peoria  Pump  and  Implement  Co.,  and  discounted  or  advanced  upon  you  for  said  company;  and  we 
waive  notice  of  the  acceptance  of  this  guarantee,  and  of  any  and  all  indebtedness  at  any  time  covered  by  same. 

'"^litWCBS  our  hands  and  seals  at  Peoria,  Illinois,  the  17th  day  of  January,  1893.    "G,  G.  Geiger.  [seal] 

"  G.  H.  WvMOND.  [seal] 
*'E.  T.  Brawley.  [seal] 
*' Joseph  Elder.  [seal]" 

On  the  date  of  this  guaranty  the  Peoria  Savings  ard  Loan  Co.  discounted  paper  for  the  Peoria  Pump  and  Imple- 
ment Co.    It  was  held  that  the  guaranty  would  not  cover  this  paper — but  only  paper  made  after  its  date. 


GUARANTY r 
VOID  BECAUSE  GUARANTORS  >^  ERE  NOT 
NOTIFIED  OF  ITS  ACCEPTANCE. 


1  he  Urake  Roofing  Ciuiipany,  desiring  to  extend 
liieircisdit  ai  the  German  Savings  Bank,  and  nui 
wishing  ro  be  annoyed  by  furnishing  indorsers  from 
time  to  time,  the  secretary  of  the  company  proposed 
to  the  bank  that  the  ompany  furnish  a  written 
guaranty  of  several  parties  to  the  amount  of  $500. 
to  which  proposition  the  bank  agreed  and  there- 
after the  secretary  deposiied  with  the  bank  this 
guaranty.  The  company  got  behind  at  the  bank 
but  the  guaranty  could  not  be  enforced  as  the  bank 
lirtd  not  notified  the  guarantors  of  if;  acceptance. 


,  McMASTfTR'S  HeVERSED  CASES. 


"  For  the  purpose  of  inducing  the  German  Savings  Bank  of  Des  Moines,  Polk  county,  Iowa,  to  extend 
credit  to  the  Drake  Roofing  Company,  the  undersigned,  J.  F.  N.  Drake,  F.  O.  Drake,  A.  T.  Cottrell  and  R.  T.  C. 
Lord,  hereby  guaranty  to  the  said  German  Savings  Bank  payment  of  all  notes,  checks,  drafts,  overdrafts,  and 
other  evidences  of  indebtedness  which  may  accrue  from  the  said  Drake  Roofing  Company  to  the  said  German 
Savings  Bank,  within  six  months  from  the  date  of  this  guaranty,  not  to  exceed  the  sum  of  five  hundred  dollars,  it 
being  the  intention  of  this  contract  to  secure  payment  to  the  said  German  Savings  Bank,  and  the  undersigned 
hereby  agree  to  pay  to  the  said  German  Savings  Bank  all  notes,  checks,  drafts,  overdrafts,  and  other  evidences  of 
indebtedness  from  said  Drake  Roofing  Company  to  said  German  Savings  Bank,  which  may  accrue  within  six 
months  from  the  date  hereof,  not  to  exceed  five  hundred  dollars,  waiving  demand,  notice  and  protest  on  the  part 
of  the  said  German  Savings  Bank  in  collecting  said  sums  from  said  Drake  Roofing  Company." 


Des  Moines,  Oct.  2,  1895. 


J.  F.  N.  Drake,  [seal] 

F.  O.  Drake.  [seal] 

A.  P.  Cottrell.  [seal] 

R.  T.  C.  Lord.  [seal] 


GUARANTY— PERSONAL  — NOT  ASSIGNABLE. 

54  MoMASTER'S  COMMERCIAL  DIGEST,* 
61  N.  V.  40. 

John  W,  Barnes  agreed  to  furnish  Edward  F.  Barrow  flour  to  be  sold  on  com- 
mission. John  Barrow  gave  guaranty  in  writing  that  he  would  become  responsible 
for  such  goods  as  went  into  E.  F.  Barrow's  hands  under  this  agreement.  There  was 
a  default,  and  it  appeared  that  the  flour  furnished  was  furnished  by  John  W.  Barnes 
&  Co.,  a  firm  cf  which  John  W.  Barnes  was  a  member.  The  court  held  that  John 
Barrow  could  not,  for  this  reason,  be  held  on  his  guaranty,  and  said  in  part ;  "  In  the 
Roman  law,  the  rule  now  under  consideration  assumes  the  form  of  a  maxim."  "An 
agreement  of  guarantee  made  with  one  person  cannot  be  extended  to  another 
person."  Some  of  the  English  cases  which  turn  upon  this  principle  are  :  Lord 
Arlington  v.  Merricke  (2  Saund.,  414) ;  Wright  v.  Russel  (2  W.  Black.,  934);  Myers  v. 
Edge  (7  T.  R.,  254);  Barker  v.  Parker  (Ibd.  287);  Simson  v.  Cooke  (1  Bing.,  452); 
Shang  V  .Lee  (3  East.  484);  Spies  v.  Houston  (4  Bligh  [N.  S.  ]  515);  Dey  v.  Davy 
(10  Ad.  &  Ell.,  30).  The  rules  governing  letters  of  credit  depend  upon  the  same 
clortrine.    The  whole  subject  is  well  illustrated  by  the  case  of  Philip  v.  Melville 


(cited  in  Burge  on  Suretyship,  p.  68).  In  that  case,  Melville  recommended  one  Tells 
to  Dusie  for  a  supply  of  spirits,  and  guaranteeing  the  payment.  Dusie  wrote  on  the 
back  of  the  letter  of  credit  an  assurance  to  C.  &  J  Philip,  plaintiffs,  that,  not  hiving 
the  article  himself,  he  had  sent  Tells  with  the  letter  of  credit,  on  which  they  might 
rely.  They  having  furnished  the  spirits  sued  Melville.  The  Court  held,  that  a  letter 
of  credit  addressed  to  a  particular  person  is  limited  to  him,  and  that  the  writer  must 
be  held  to  have  granted  it  in  reliance  on  his  prudence  and  discretion  in  acting  upon 
it ;  that  such  a  letter  contains  no  general  power  to  interpose  the  writer's  credit,  or 
transmit  his  guarantee  ;  and  this  is  specially  to  be  observed  where  the  general  terms 
bf  the  letter  made  the  personal  limitation  the  only  restraint  on  the  responsibility 
of  the  writer. 

"  In  the  case  at  bar  the  defendant  agreed  that  Edward  F.  Barrow  should  account 
to  John  W.  Barnes  for  goods  received,  and  should  sell  on  commission  for  him,  and 
be  accountable  for  the  proceeds,  after  deducting  commissions  to  be  allowed  him  by 
Barnes.  It  is  not  possible  on  any  principle  of  construction  established  by  the  com- 
mentators and  the  cases  cited,  to  add  to  the  name  of  John  AV.  Barnes  those  of  William 
and  Charles  Barnes,  his  copartners,  it  not  being  made  to  appear  that  the  defendant 
knew,  at  the  time  of  the  execution  of  the  contract,  that  it  was  entered  into  by  John 
W.  Barnes,  not  for  himself  merely,  but  also  for  his  copartners." 


GUARANTY— BUILDING  CONTRACT. 
aeoA;  mcmaster  s  commercial  digest- 

64  PAC.  11 22. 

A  surety  on  a  bond  of  a  building  contractor,  conditioned  to  complete  the  building  according 
to  the  contract,  is  not  liable  thereon  where  the  provision  in  ihe  building  contract  that  the  first 
three  installments  of  the  price  were  to  be  for  only  75  per  cent,  of  the  value  of  the  woik  done  was 
violated  by  a  payment  on  the  third  installment  of  a  sum  which  was  in  excess  of  the  75  per  cent,  of 
the  value  of  the  work,  more  than  the  amount  sued  for. 

"Reavis,  J.  Defendant  Mackay  entered  into  a  building  contract  with  Heilbron,  now  repre- 
sented by  the  appellants  as  executors,  for  the  sum  of  $1,545.  Mackay  agreed  to  furnish  all  labor 
and  material  necessary  for  the  construction  of  a  house,  and  to  complete  the  same  on  or  before 
December  22,  1893.  The  work  was  to  be  performed  and  finished  under  Ihe  direction  and  to  t'.e 
satisfaction  of  architects  acting  as  agents  of  Heilbron,  and  the  contract  contained,  among  others, 
"hfi  following  stipulation,  with  reference  to  the  payment  of  the  contractor,  Mackay,  viz.  ;  That  the 
whole  iimount  should  be  p^id  in  four  installments,  i.ccording  t^  "lie  progress  of  ihe  building,  and 


upon  certificates  of  the  architects,  and  all  but  the  last  payment  to  be  to  the  amount  ot  but  75  per 
cent,  of  the  value  of  the  work  done  and  material  furnished,  as  estimated  by  the  certificate.  At 
the  time  the  contract  was  executed,  Mackay,  with  Hinckley  as  surety,  executed  and  delivered  to 
Heilbron  a  bond  for  the  faithful  performance  of  the  contract,  which  contained  the  following  con- 
dition :  '  If  the  said  E.  A.  Mackay  shall  fulfill  said  contract  according  to  the  terms  as  therein  set 
forth,  and  pay  or  cause  10  be  paid  all  bills  for  material  and  labor  in  the  construction  of  said  build- 
ing, then  the  above  obligation  10  be  void.'"  *■***"  It  appears  from  the  record  that,  after 
the  payment  of  the  first  and  second  installments,  the  payments  were  made  to  the  contractor  ia 
excess  of  the  75  per  cent,  estimate  of  the  whole  contract  before  the  completion  of  the  building,— 
an  excess  greater  than  the  amount  claimed  here.  The  contract  to  build  and  the  bond  securing  a 
faithful  performance  of  the  contract  are  to  be  read  together;  and,  under  the  stipulation  contained 
in  the  contract,  but  75  per  cent,  of  the  amount  earned  should  have  been  paid  on  the  third  install, 
ment,  and  none  on  the  last  installment,  until  the  completion  of  the  building,  and  production  o( 
evidence  that  all  laborers  and  material  men  had  been  paid.  The  surety  is  released  where  the  pay- 
ments of  the  contractor  are  in  excess  of  the  amounts  provided  for  under  the  contract.  (Bragg  v. 
Shain,  49  Cal.  131  ;  Brennan  v.  Clark.  [Neb.]  45  N.  W.  472;  Gray  v.  School  Dist.  [N'cb.]  53  N. 
W.  377;  Simonson  v.  Thori.  [Minn.]  31  N.  W.  861  ;  Evans  v.  Graden.  [Mo.  Sup.j  23  S.  W.  439: 
Board  v.  Branham,  57  Fed.  179;  St.  M:.ry*s  Collcse  v.  Meagher.  [Ky.]  11  S.  W.  6aS.)  Tlie 
judgment  of  the  Superior  Court  is  alTirmcd," 


r 


GUARANTY- BUILDING  CONTRACT. 


236  a;  McMASTER-a  COMMERCIAL  DrGEST; 
47  8.  W.  A09. 

"The  facts  in  ihis  case  are  as  follows:  The  plainliff,  Michael  Kelley,  on  the  28th  day  of 
April,  1894.  entered  into  a  contract  with  defendant,  C.  A.  O'Neal,  by  which  O'Neal,  for  the  sum 
of  $2,000.  10  be  paid  by  Kelley,  agreed  to  furnish  materials  and  erect  for  said  Kelley  a  two-story 
brick  house  in  the  city  of  Texarkana.  The  contract  required  that  the  building  should  be  con- 
structed according  to  specifications  named  therein,  and  that  it  should  be  completed  and  turned 
over  to  Kelley  free  of  all  liens  on  or  before  the  ist  day  of  July,  1894.  The  defendants,  C.  C. 
Dorrian.  H.  Wolf.  W.  L.  Snow  and  T.  J.  Wheeler,  became  sureties  on  the  bond  of  O'Neal  for  the 
performance  of  such  contract.  O'Neal  having  failed  to  perform  his  contract,  Kelley  brought  thin 
action  on  his  bond  to  recover  ihe  sum  of  $1,000  as  damages  suffered  by  him  on  account  of  such 
failure.  The  sureties  set  up  that  ihere  had  been  a  material  alteration  of  the  contract.  On  this 
point  Kelley  testified  at  the  trial  as  follows  :  "The  contract  called  for  a  building  96  feet  long  for 
lower  story,  and  75  feet  long  for  upper  story.  After  the  Webber  building  had  given  away,  1  said 
to  O'Neal:  'I  wish  the  upper  story  of  my  building  had  been  Ihe  same  length  as  the  lower  stor^', 
because  I  was  afraid  we  would  have  the  same  trouble  they  were  having  with  the  Webber  building.' 
Mr.  O'Neal  said  it  would  only  take  a  lillle  extra  work,  and  would  in  no  way  affect  the  contract  to 
make  the  chanpe.  I  told  him  I  did  not  want  to  do  anything  th^t  would  change  the  contract,  and 
if  it  could  be  done  so  as  not  to  change  the  contract,  10  figure  it  up,  and  say  how  much  it  would 
cost.  He  did  so,  and  said  it  would  cost  me  $25,  and  I  gave  him  a  check  immediately.  The  only 
extra  work  was  the  ceiling,  flooring  and  upper  joists.    The  longitudinal  walls  were  already  there. 


and  I  estimated  that  $25  was  a  reaso-iablc  price  for  extra  work,  and  iherelore  paid  it."  There 
was  a  judgment  against  the  defendants  for  the  sum  of  $500,  from  which  thi'y  appealed." 

The  opinion  reads  in  part:  "The  obligor  and  lUe  obligee  are  bound  to  know  that,  if  they 
find  it  convenient  to  change  or  vary  the  terms  of  the  original  contract,  they  must  seek  the  assent 
of  the  surety,  because  it  is  his  contr.ict  as  well  as  theirs.  And  if  they  will  not  do  so  they  take 
upon  themselves  the  hazard,  and  thus  loosen  the  bonds  of  the  surety."'  (Hibbs  v.  Rue,  4  Pa.  St. 
348).  Any  material  alteration  in  the  terms  of  such  a  contract  discharges  the  surety  if  he  has  not 
consented  to  the  change  ;  and  this  is  so  even  if  the  alteration  be  for  the  benefit  of  th?  surety,  for, 
although  the  principals  may  change  their  contract  to  suit  their  pleasure  or  convenience,  they  can- 
not thus  bind  the  surety,  and  as  the  new  contract  abrogates  the  old,  Ihe  surety  is  discharged  from 
all  liability  unless  he  has  consented  to  the  alteration.  (Warden  v.  Ryan,  37  Mo.  App.  466;  Judah 
V.  Zimmerman,  22  Ind.  3S8;  Simonson  v.  Grant,  36  Minn.  439,  31  N.  W.  861;  Bethune  v.  Dozier, 
10  Ga.  235;  24  Am.  &  Eng.  Enc.  Law,  837;  2  Brandt,  Sur..      278,  288.) 

The  alteration  of  the  contract  shown  in  this  case  was  material,  and  there  is  nothing  to  show  that 
the  sureties  consented  thereto.  It  required  that  O'Neal  should  erect  a  building  of  dimensions 
different  from  that  required  by  the  original  contract,  and  for  which  he  was  to  receive  a  different 
consideration. 

The  fact  that  Kelley  refused  to  agree  to  the  alteration  until  O'Neal,  the  contractor,  had 
assured  him  that  it  would  not  affect  the  original  contract  is  a  matter  of  no  moment;  for  O'Neal  did 
not  represent  the  sureties,  and  they  are  not  bound  by  his  opinion  on  a  question  of  law.  Nor  does 
the  fact  that  he  afterwards  failed  to  carry  out  the  contract  as  altered  affect  Ihe  question.  It  is  the 
execution  of  the  new  contract,  and  not  the  performance  thereof,  that  discharges  the  sureties. 
There  is  no  dispute  about  the  facts  of  this  case,  and  after  considering  same,  we  are  of  the  opinion 
that  the  judgment  of  the  Circuit  Court  against  the  sureties  of  O'Neal  is  not  supported  bv  the  evi- 
dence. The  judgment  as  to  them  is  reversed,  and  the  case  is  dismissed,  but  ns  to  O  .Niil  it  is 
affirmed," 


GUARANTY— DEPARTURE  FROM  TERMS  OF  CONTRACT. 

SaaAi  MCMASTKR-S  COMMERCIAL  DiaEST 
64  BO.  W.  RKP.  a03. 

Henry  House  entered  into  a  written  contract  on  July  ii,  1895,  with  the  firm  of 
Bonnell,  Matthews  &  Harding,  for  the  performance  by  them,  under  the  direction  and 
to  the  satisfaction  of  the  architects,  acting  as  the  agents  of  the  owner,  "of  the  work 
included  in  the  erection,  construction,  and  completion  of  one  certain  three-story  brick 

building,  agreeably  to  the  drawings  and  specifications  made  by 

the  said  architects,  including  all  labor  and  material  incident  thereto," 

for  the  price  of  $20,500,  payable  in  specified  installments.  The  contract,  among 
other  things,  provided  : 

"  3rd.  Should  any  alteration  be  required  in  the  work  as  shown  or  described  by 
the  drawings  or  specifications,  a  fair  and  reasonable  valuation  of  the  work  added  or 
omitted  shall  be  made  by  the  architects,  and  the  sum  herein  agreed  to  be  paid  for  the 
work  according  to  the  original  specifications  shall  be  increased  or  diminished,  as  the 
case  may  be.    .    .    .   •  ^ 


The  contractors  gave  a  bond  with  sureties  for  their  jjerfortnance  of  the  contract. 
The  bond  given  by  the  contractors,  with  defendant  as  surety,  bore  date  August  6, 
1895,  and  was  conditioned  in  the  usual  way  for  the  faithful  performance  by  the  con- 
tractors of  their  undertaking.  By  supplemental  agreement  between  the  owner  and 
contractors,  bearing  date  October  16,  1895,  which  was  indorsed  on  the  original,  it  was 
provided  that  the  contractors  should  put  a  fourth  story  on  the  building  for  the  addi- 
tional "sum  of  $4,500,  in  accordance  with  the  third  clause  of  this  agreement;"  the 
contractors  to  have  additional  time  of  thirty  days  to  complete  the  building. 

In  a  suit  against  the  sureties  they  were  held  released ;  the  court  said  in  part : 
"We  affirm  the  judgment  of  the  court  below  upon  the  ground  that  the  supple- 
mental agreement  of  Henry  House  with  the  contractors,  Bonnell,  Matthews  &  Hard- 
ing, for  the  addition  of  a  fourth  story  to  the  building,  was  not  contemplated  by  the 
third  paragraph  of  the  contract,  and  was  a  material  alteration  thereof.  In  so  far  as 
this  was  a  question  of  fact,  we  approve  the  implied  finding  of  the  court  below.  The 
identity  of  the  work  was  changed.  Miller-Jones  Furnitare  Co.  v.  Ft.  Smith  Ice  & 
Cold-Storage  Co.,  (Ark.)  50  S.  W.  508. 


GUARANTOR  — DEATH  — EXTENSION  OF  TIME 
OF  PAYMENT. 

boa;  McMASTCR'S  COMMERCrAL  DtaEST; 
16  R.  I.  148. 

S.  P.  Carpenter  gave  a  guaranty  under  seal  to  the  Eagle  Bank  by  which  he  agreed  to  become 
responsible  to  the  bank  for  any  paper  of  his  son  which  the  bank  might  discount  or  purchase.  The 
goaraniei-'  provided  that  ii  should  be  binding  until  Carpenter  notified  the  bank  in  writing  of  its 
termination,  and  that  the  bank  could  extend  time  of  payment  or  renew  any  of  the  paper  and  that 
the  guaranty  should  cover  such  renewals. 

Carpenter  died,  and  after  his  death  the  bank  renewed  one  of  such  notes.  The  court  said  the 
guaranty  could  not  be  held  on  the  original  note  or  the  renewal.  Death  terminated  the  guaranty 
so  far  as  any  future  transactions  were  concerned,  and  the  extension  of  time  of  the  original  note 
released  the  guaranty  as  to  it,  as  death  would  also  terminate  any  right  to  make  new  extensions. 

The  court  said,  in  this  case:  "Guaranties  have  been  divided  into  two  classes:  one  where 
the  consideration  is  entire,  that  is,  where  it  passes  wholly  at  one  time  ;  the  other,  where  it  passes 
at  different  times,  and  is,  therefore,  separable  or  divisible.  The  former  are  not  revocable  by  the 
guarantor,  and  are  not  terminated  by  his  death  and  notice  of  that  fact,  8  Me.  14 ;  18  Ala.  458 ; 
40  Iowa,  46g  ;  113  111.  390.  The  latter,  on  the  contrary,  may  be  revoked  as  to  subsequent  tnns- 
actions  by  the  guarantor,  upon  notice  to  that  effect,  and  are  determined  by  his  death  and  notice  of 
that  event. 

"The  distinction  between  these  two  classes  of  guarantees  is  well  illustrated  by  Lush,  Lord 
Justice,  in  Llovli  v.  Harper,  L.  R.,  16  Ch.  Div.  son  -jtq.    '  /\n  instance  of  the  first.'  he  remarks. 


'  is  where  a  person  enters  into  a  guaranty  that,  in  consideration  of  the  lessor  granting  a  lease  to  a 
third  person,  he  will  be  answerable  for  the  performance  of  the  covenants.  The  moment  the  lease 
is  granted  there  is  nothing  more  for  the  lessor  to  do,  and  such  a  guaranty  as  that  of  necessity  runs 
on  throughout  the  duration  of  the  lease  The  lease  was  intended  to  be  a  guaranteed  lease,  and  it 
is  impossible  to  say  that  the  guarantor  could  put  an  end  to  the  guaranty  at  his  pleasure,  or  that  it 
could  be  put  an  end  to  by  his  death,  contrary  to  the  manifest  intention  of  the  parties.' 

"Instances  of  the  second  class  are  more  familiar.  They  are  where  a  guaranty  is  given  to 
secure  the  balance  of  a  running  account  at  a  banker's,  or  the  balance  of  a  money  account  for 
goods  supplied.  There  the  consideration  is  supplied  from  time  to  time,  and  it  is  reasonable  to 
hold,  unless  the  guaranty  stipulates  to  the  contrary,  that  the  guarantor  may  at  any  time  terminate 
the  guaranty.  He  remains  answerable  for  all  the  advances  made  on  all  the  goods  supplied  upon 
his  guaranty  before  the  notice  to  determine  it  is  given  ;  but  at  any  time  he  may  say  '  I  put  a  stop 
to  this  ;  I  do  not  intend  to  be  answerable  any  longer  ;  therefore  do  not  make  any  more  advances 
or  supply  any  more  goods  upon  my  guaranty.' 

"  The  guarantees  in  the  case  at  bar  come  within  the  second  class  above  considered.  Thej 
were,  therefore,  upon  the  authorities  cited,  terminated  by  the  death  of  the  guarantor  and  notice  of 
it  to  the  plaintiff,  as  to  all  subsequent  transactions.  As,  however,  the  note  described  in  the 
declaration  had  been  discounted,  and  the  net  proceeds  had  been  paid  to  the  maker  prior  to  the 
death  of  the  guarantor,  the  plaintiff  would  have  been  entitled  to  recover  but  for  the  fact,  set  up  in 
the  pleas,  that  after  notice  of  the  death  of  the  guarantor  it  extended  the  time  of  payment  for  a 
further  period  by  taking  a  new  note  from  the  principal  debtor  and  receiving  the  interest  thereon 
in  advance,  without  the  consent  of  the  defendant,  and  without  any  reservation  of  hia  right  assented 
to  by  the  principal,  and,  in  default  of  such  payment,  to  pay  the  debt  himself,  and  proceed  at  once 
against  the  principal.  That  such  action  on  the  part  of  the  plaintiff  was  sufficient  to  release  the 
estate  of  the  guarantor,  and  the  defendant  as  his  representative,  from  liability,  is  too  well  estab> 
lished  to  need  the  citation  of  authority." 


GUARANTY  — LACK  OF  CONSIDERATION  — ASSIGNMENT 
OF  GUARANTY. 

L.essrs.  Abaye,  Vison  Bimar  &  Co.  assigned  the  "  new  account "  mentionod  in  thi3  guaranty  to  Charles  Brum, 
and  authorized  him  to  collect  anything  due  on  ibe  guaranty.  The  principal  was  in  default  and  the  guarantor  was 
sued,  It  was  held  that  the  guaranty  was  void  for  the  reason  that  no  consideration  was  expressed  in  the  writing. 
It  was  claimed  that  extension  oi  time  of  payment  was  a  good  consideration,  but  the  court  held  that  there  was  no 
forbearance  to  sue  expressed  or  implied  here  that  the  creditor  could  enforce.  It  was  further  held  on  appeal  that  the 
guaranty  was  personal  and  could  not  be  assigned  so  as  to  give  the  assignee  a  right  of  action  against  the  guarantor. 
24A,  VOL.  1,  McMASTER'S  COMMERCIAL  CASES. 
98  N.  Y.  S.  REP.  144. 

"I  guaranty  the  'new  account'  of  Mr.  W.  C.  Gilbert,  my  husband,  with  Messrs,  Ab.iye, 
Vison  Bimar  &  Co,,  amounting  to  this  dale  to  one  hundred  and  twenty  thousand  francs,  repie 
senting  the  disbursements  made  by  the  firm  of  Abnye,  Vison  Bimar  &  Co.  since  the  first  day  of 
January,  one  thousand  eight  hundred  and  ninety-one. 

"  It  is  well  understood  ; 

"(i)  Thai  all  the  profits  obtained  from  Mr.  Gilbert's  business  from  and  after  this  day  shall  be 
applied  to  the  discharge  of  this  account. 

"  (2)  That,  in  case  of  the  dealh  of  Mr.  Gilbert,  Messrs,  Abaye,  Vison  Bimar  &  Co..  who  are  lo 
collect  his  life  insurance,  will  discharge  me  completely  from  the  present  guaranty. 

"(3)  In  case  that,  contrary  to  the  expectation  of  Mr.  Gilbert,  he  should  not  be  able  to  pay  off 
th  =  s  account  l-i'twcen  now  and  the  end  of  December,  iSg6,  and  should  oblige  you  to  require  l!ic 
excctirinn  of  this  uuarantv.  I  shall  only  be  able  to  acquit  myself  towards  you  by  paying  you  ohl-- 
hai;  of  my  income,  amounting  to  si.t  ihous.ii.d  fi'ancs  a  year;  not  possessing  any  capital  of  which 


1  cjn  di^iiij  -c.     I  >\  ill  iliirulurv;  n-tjuifu  luv  i.i;i.i.?3.iiy  .ind  prD|i.iinijii..i ;  <,.i  y 

"  Madt;  at  Paris  the  fourteenth  day  of  January,  one  thousand  eight  liundii.d  ;iiid  ninety-five. 

[Signed]    M.  Gilbert. 

'■  I  authorize  the  above.  [Signed]    \V.  C.  Gilbert." 

The  court  said  in  part :  "  It  is  argued  that  this  guaranty  clearly  imports  an  agreement  on  the 
part  of  the  promisees  to  forbear  to  enforce  payment  of  the  principal  indebtedness  from  the  date 
of  the  instrument,  January  14,  1895,  until  the  end  of  December,  ibg6,  It  is  well  settled  that  an 
aureement  of  forbearance  to  sue  is  a  good  considerauon  for  a  promise  lo  pay  the  debt  of  anoilnr. 
Bank  v.  Parker,  130  N.  Y.  415;  29  N.  E.  1094,  and  cases  iherein  cited.  These  authorities,  then, 
would  sustain  the  position  of  the  apptliaius,  if  wc  could  find  in  the  insKument  in  question  any 
evidence  of  the  existence  of  a  legal  consideialiun,  in  the  shape  of  an  agreement  to  foibcar  the 
enforcement  of  payment  as  against  th.e  principal  debtor.  This,  however,  we  aic  unable  to  dis- 
cover. There  was  notliing  in  the  guaranty  which  prevented  llic  prunusees  from  suing  Mr.  Gilbert 
immediately.  The  terms  of  liie  inslrun.cnt  did  preclude  thcni  from  enforcing  the  guaranty,  as 
ag.ninst  Mrs.  Gilbert,  until  the  end  of  December.  iSc)6,  but  ihcy  imported  no  intent  to  grant  anv 
indulgence  whatever  to  Mr.  Gilbert.  Indeed,  the  p  ovision  th.it  all  the  profiis  obtained  from  his 
business  from  and  after  the  date  of  the  gUiiranty  should  be  apiilicd  lo  the  disclinri,'e  of  the  gnaraii- 
tied  account  implied  that  the  payment  of  his  indebtedness,  instead  of  bt-iii;^  po^iponed  at  all,  was 
to  be  begun  at  once, 

"Another  question  is  involved  in  the  derision  of  lh<-  cmiri  below,  ahlmn,.!]  ii  v-.ms  not  ex- 
pressly passed  upon,  The  defendant  contends  tliat  the  pl.unt  i  1  =  h  i <■■<.;  .ii  iinin.d  im  n  ■  l  1  1.1  enforce 
the  guaranty  by  virtue  of  ihc  assifrnment  of  the  inslrumt-iii  in  lliuin  l  ■.  iln  i.n.in  I  lunniisccs, 
Messrs.  Abaye,  Vison  Himar  Co.  This  depends  on  ihr  .  Ii..i-.,.:i.-r  .  .i  in-  v'M'-r.-  ! it  was 
special,  it  wis  not  assignable  until  a  ^i^'ht  of  action  had  aii^i  'i  >  >     Bui^,  \    ^  .     i..iiin,  <)3 

N.  Y.  273;  Shelman  &  Northrup,  109  N.  V.  473.  In  our  opLuion,  the  guar-mf  in  r.iiHrovcis> 
heie  may  fairly  be  regarded  as  thus  restricted,    98  N.  Y.  St.  R'  p.  1  j  i," 


GUARANTY  — APPLICATIJN  OF  PAYMENT. 

64  a;  vol.  I.    MoMASTER>S  COMMERCIAL  CASES; 
47  AT.  REP.  160. 

The  Cheshire  Beef  Company  sued  George  C.  Thrall  on  ihe  following  siaiement  of  facts  ; 

"Prior  10  Otiober  31,  1S95.  ihe  plaintiff  (The  Cheshire  Beef  Co.)  had  sold  beef  lo  one  Judson 
H.  Gram.  On  ihat  day  ihe  plaintiff  and  Grant  senled,  and  their  accounts  were  closed  and  paid 
up  to  that  date,  and  thereupon  the  defendant  executed  and  delivered  to  the  plaintiff  the  following 
writing  :  '  Rutland,  Vt.,  October  31,  1895.  This  is  to  certify  that  1,  George  C.  Thrall,  of  Rut- 
land, Vt.,  will  he  responsible  10  the  amount  of  $700,00  10  the  Cheshire  Beef  Co.  for  goods 
purchased  by  Judson  H.  Grant,  of  Rutland,  Vi.  In  case  of  failure  of  said  Grant  to  meet  this 
obligation,  I  guarantee  its  payment.  Geo.  C.  Thrall,  Surety."  On  the  same  day  the  plaintifif  sold 
and  delivered  10  Grant  a  bill  of  beef  amounting  to  ihe  sum  of  $404.66.  Between  said  last-named 
date  and  January  2S.  1896,  the  plaintiff  sold  and  delivered  to  Gram  beef  10  the  amount  of  $3,212.05, 
and  between  said  dates  Grant  paid  to  the  plaintiff  $2,528.23.  at  different  times  and  in  different 
sums.  On  said  2Sth  day  of  January,  1896,  there  was  due  the  plainliff  for  beef  thus  sold  and 
delivered  to  Grant  $653.82,  which  sum  remained  unpaid  at  the  time  of  the  trial.  The  beef  in 
quesiion  was  sold  and  delivered  to  Grant  by  Ihe  plainliff  on  the  strength  of  the  defendant's 
guaraniy." 

The  rnurt  held  that  the  guaranty  only  covered  the  first  $700  worth  of  beef  sold  ;  and  under 
the  rule  of  the  appliration  of  payments,  when  Grant  had  paid  in  $700  on  account  the  guaranty 
tvould  be  released.   The  appellate  court  said : 


"  .Munson.  J.  The  defendant  agieed  in  writing  to  be  responsible  to  the  plaintiff  as  a  guaran- 
tor '  to  the  amount  of  $700.'  '  lor  goods  purchased  by  Judson  H.  Grant.'  The  question  raised  is 
whether  this  was  a  limited  or  a  continuing  guar.mty.  The  circumstances  connected  with  the  giving 
of  Ihe  guaranty  plainly  require  that  the  words  'goods  purchased  '  be  given  a  future  significance. 
The  language  thus  construed  is  equally  applicable  to  both  kinds  of  guaranty.  We  find  nothing  in 
the  case  that  affords  further  aid  in  determining  what  was  intended.  *«**»» 

"It  is  said  by  some  authorities  that  the  contract  of  guaranty  should  be  construed  liberally  in 
favor  of  its  purpose;  that  the  words  used  should  be  taken  as  sirongly  against  the  guarantor  as 
their  sense  will  permit;  and  that  if  one  intends  to  be  surety  only  for  a  single  dealing  he  should  be 
careful  to  say  so.  It  is  said  by  olhcr  authorities  that  the  scope  of  a  guaranty  should  be  restricted 
to  the  plain  and  obvious  import  of  its  language  ;  that  a  mere  surety  should  not  be  held  to  pay  the 
debt  of  another  by  any  forced  construction  ;  and  that  in  a  doubtful  case  the  presumption  should 
be  asainst  the  construction  that  the  guaranty  is  continuing.  It  is  said  by  some  that  the  courts  seem 
inclined  to  favor  an  extension  of  the  liability  in  cases  of  doubt,  while  others  say  that  the  decided 
weight  of  auihority  is  in  favor  of  the  restrictive  rule.  We  are  not  aware  that  this  court  has  passed 
upon  the  matter,  although  an  expression  of  Judge  Bennett  in  Noyes  v.  Nichols,  28  Vt.  159,  has 
led  a  text  writer  to  infer  that  it  favored  the  view  first  stated.  Bui  we  think  it  is  the  more  reason- 
able conclusion  that  one  who  becomes  a  guarantor  without  valuable  consideration  should  not  be 
su'  jccied  to  an  increased  liability  by  leg.1l  implication,  and  that  ihe  buiden  should  be  upon  the 
one  who  desires  a  continuing  guaranty  to  see  that  the  language  employed  is  sufficient  to  Indicate 
ii.  We  hold  that  the  defendant's  liability  was  limned  to  the  first  $700  worth  of  goods  purchasea 
Judgment  afliTmcd  " 


Ciiiuriiiity  ol"  any  Liability— 
Baul^ing^;  Brolcers. 


This  ^aranty  is  intended  to  cover  points 
which,  it  not  specifically  mentioned,  are  not 
included  in  many  forms  of  general  guaranty. 
They  are  drawn  to  cover  individual  indebted- 
ness, and,  as  worded,  would  not  probably 
cover  indebtedness  of  a  firm  of  which  the 
principal  debtor  was  a  member;  or  indebted- 
ness purchased  of  other  parties.  If  these 
points  are  to  be  covered  they  should  be  par- 
ticularly mentioned.  The  pnncipal  points, 
which  are  often  held  to  release  a  guarantor  if 
not  specifically  waived,  and  which  are  sought 
tobe  covered  here,  are:  Waiver  of  acceptance; 
notice  of  default;  clianre  or  release  of  other 
security;  extension  of  time  of  payment;  re- 
newal; application  of  certain  payments;  ad- 
vances made  a. ier  death  of  guarantor,  and 
the  covering  of  various  forms  of  the  original 
or  subsequently  changed  indebtedness. 


Guaranty  of  any  Liability— Banliiug;  liroUers 

Whereas  A.  B.  has  or  may  become  indebted  or  liable  to  C.  D.,  in  open  account  or  by  reasoti  of  C.  D.  purchasing,  discounting,  advandng 
money  on,  negotiating  or  selling  negotiable  or  non-negotiable  instruments  on  which  A.  B,  is  directly  or  contingently  liable,  or  for  any  other 
reason  or  account  whatever;  Now,  therefore,  for  value  received,  1  hereby,  to  the  extent  ol  dollars,  do  guaranty  the  payment  of  and 

all  such  liability  or  indebtedness  or  of  any  ultimate  balance  that  may  be  due  by  A,  B.  to  C.  D.,  his  heirs,  executors,  administrators,  transferees  or 
assigns,  by  reason  of  the  premises  aforesaid.  Acceptance  of  this  guaranty  by  any  beneficiary  is  hereby  waived,  as  is  also  any  notice  of  default. 
The  renewal  or  extension  of  time  of  payment  of  any  of  the  aforesaid  liability  or  indebtedness  or  ultimate  balance  IS  hereby  agreed  to,  as  is  also 
any  release,  addition  to,  or  change  of  other  security.  The  application,  made  in  the  discretion  of  the  beneficiary,  of  any  payments  made  by  A.  B. 
to  any  beneficiary  hereof,  whether  applied  on  any  of  the  above  mentioned  indebtedness  or  on  other  indebtedness  of  A,  B,  to  such  beneficiary,  is 
hereby  agreed  to,  as  is  also  any  and  all  acts  of  A.  B.  in  relation  to  the  aforesaid  liabilities  or  indebtedness. 

This  guaranty  shall  apply  first  to  any  indebtedness  or  liability  ultimately  owned  by  C.  D.;  second,  to  liability  or  indebtedness  on  which 
C.  D.  may  be  liable  as  indorser,  guarantor  or  surety,  or  which  he  may  have  pledged ;  third,  to  any  other  such  indebtedness  or  liability  which  C.  D. 
may  have  negotiated  or  transferred.  This  guaranty  is  a  continuing  one,  binding  mystlf,  my  heirs,  executors,  administrators,  and  in  case  of  my 
death  with  this  guaranty  previously  unrevoked,  it  shall  cover  all  transactions  made  previous  to  the  time  when  C.  D.  shall  he  actually  informed  of 
my  .death. 

Witness  my  hand  and  seal  this 
day  of     ,  1 9  , 


[Seal.] 


Guaranty  of  any  Liability — 
Mercantile  or  Banking*. 


This  guaranty  is  intended  to  cover  points 
which,  if  not  specifically  mentioned,  are  not 
included  in  many  forms  of  general  guaranty. 
They  are  drawn  to  cover' individual  indebted- 
ness, and,  as  worded,  would  not  probably 
cover  indebtedness  of  a  firm  of  which  the 
principal  debtor  was  a  member  or  indebt- 
edness purchased  of  other  parties.  If  those 
poinls  are  to  be  covered  they  should  be  par- 
ticularly mentioned.  The  principal  points, 
which  are  often  held  to  release  a  guarantor  if 
not  specifically  waived,  and  which  are  sought 
lo  be  covered  here,  are;  Waiver  of  acceptance; 
notice  of  default;  change  or  release  of  other 
security;  extension  of  time  of  payment;  re- 
newel;  application  of  certain  payments;  atl- 
vancesmade  after  death  of  guarantor,  and 
tlie  covering  of  various  forms  of  the  original 
or  subsequently  changed  indebtedness. 


Guaranty  ot  any  Liability— Mercantile  or  Jiaukin^. 

For  value  received,  and  in  consideration  of  credit  heretofore  extended  or  which  may  hereafter  be  extended 
by  A.  B.  to  C  D.,  I  hereby  to  the  extent  of  dollars  guaranty  to  A.  B.,  his  heirs,  executors,  adminis- 

trators, transferees  and  assigns,  the  payment  of  any  liability  or  indebtedness  now  incurred  or  which  may  here- 
after be  incurred  by  C.  D.  to  A.  B.,  and  any  ultimate  balance  that  may  be  due  by  reason  of  such  liability  or 
indebtedness,  either  by  open  account  or  by  negotiable  or  non-negotiable  instrument  on  which  C  D.  is  or  may  be 
directly  or  contingently  liable,  or  for  any  other  account  or  reason  whatever.  This  guaranty  shall  extend  and 
cover,  in  such  amounts  and  places  as  A.  B.,  his  heirs,  executors  or  administrators  may  elect,  any  liability  or  in- 
debtedness of  C.  D.  that  A.  B.  may  have  sold,  discounted,  pledged,  negotiated  or  transferred.  Acceptance  of 
this  guaranty  by  any  beneficiary  is  hereby  waived,  as  is  also  any  notice  of  default.  The  renewal  or  extension  of 
time  of  payment  of  any  of  the  aforesaid  liability  or  indebtedness  is  hereby  agreed  to,  as  is  also  any  release,  ad- 
dition to,  or  change  of  other  security.  The  application  of  any  payments  made  in  the  discretion  of  any  beneficiary, 
whether  applied  on  the  above  mentioned  liability  or  indebtedness  or  on  other  indebtedness  of  C.  D.,  is  hereby 
confirmed,  as  is  also  any  and  all  acts  of  C.  D.  in  relation  to  such  liability,  indebtedness  or  ultimate  balance. 
This  guaranty  is  a  continuing  one,  binding  myself,  my  heirs,  executors,  administrators;  and  in  case  of  my  death 
with  this  guaranty  previously  unrevoked,  it  shall  coverall  transactions  made  previous  to  the  time  when  A.  B.  shall 
be  actually  informed  of  ray  death. 

"Witness  my  hand  and  seal  this  ) 
>  day  of  ,  19    ,  at     .   f  [Seal.] 


Collateral  Guaranty  ot  Third 
Farty. 

The  specific  points  covered  in 
this  form  are:  Extension  of  time  of 
Payment:  Compromise:  Release  of 
Other  Security:  Applications  of 
Payments:  Partnership  Indebted- 
ness: Paper  Purchased  of  Other 
Parties. 


Collateral  Guaranty  of  Third  Party. 

For  value  received,  hereby,  to  the  extent  of  dollars  and  of  any  interest,  costs  and  expanses  which  may  accrue  or 

be  incurred  in  addition  thereto  on  account  of  the  indebtedness  or  Uability  hereby  guaranteed,  hereby  guaranty  to  {Bank)  of  . .  the 

payment,  when  due,  of  any  indebtedness  or  liability  now  existing  or  which  may  hereafter  exist  from  ,  heremafter  called  pnncipal 

debtor  to  the  (Bank)and  herebyagree       that  the  said  (,  Bank)  may  grant  any  extension  of  time  to,  or  renew  any  obhgation 

or  make  any  compromise  with,  the  said  principal  debtor,  or  with  any  other  person  or  persons  liable  on  my  instrument  or  debt  with  the  said  prm- 
cipal  debtor,  and  that  the  said  (Bank  :  may,  for  or  without  value  therefor,  release  or  omit  to  perfect  or  enforce  any  securities  held  or  controlled  by 
it  now  or  hereafter,  and  shall  not  thereby,  or  by  any  neglect  as  to  any  securities,  be  prejudiced  or  m  any  way  affected  in  its  claim  hereunder,  or 
"•—r  any  liability  to  f "  me  "  or  "  us  or  any  of  us       and  further  agree       that  said  (.Bank)  may  advance  and  discount  any  amount  be- 

.     .-'       ..         ■'     .  ->        ■      ■       1,1.  ...1.   1  :  1  r.n«  tUa  .r-iA  n.-lnr-iii4l  Hahtni-    nr  nn  Hfi-niinh    of  [ 


yond  thi  said  sum  for  the  said  principal  debtor,  and  tliat  no  payment  wltitli  may  be  received  from  the  said  principal  debtor,  or  on  account  ol  any 
indebtedness  or  liability  from  ["  him  "  or  "  them  or  either  of  them  ")  to  the  said  (Bank)  shall  be  applied  in  reduetlon  of  the  liability  of  [■'  me 
or  "us  or  any  of  us  "]  hereunder  until  after  the  payment  and  satisfaction  of  any  indebtedness  or  liability  of  said  principal  debtor  beyond  the  said 
amount  This  shall  be  a  continuing  guaranty  to  the  extent  aforesaid,  and  shall  apply  to  and  secure  any  ultimate  balance  that  shall  remain  owing 
to  the  said  (Bank)  and  this  guaranty  shall  not  bediscontinued  until  written  notice  is  Eiven  to  the  saidlBank).  If  at  any  time  any  sum  owing 
from  the»aid  principal  debtor  to  thesaid(Bankl  shall  not  be  paid,  when  payable,  the  whole  amount  then  owing  from  the  said  principal  debtor 
shallbedeemed,  for  the  purpose  ofthis  instilment  and  the  liability  created  thereby,  as  forthwith  pay.able,  and  said  (Bank)  may  recover  from 
fme"  or  "US  or  any  ofus"ltbe  wholeamount  hereby  guaranteed,  or  somnch  thereof as  said  principal  debtor  may  be  owing  This  guaranty 
shall  run  in  favor  of  said  (Bmk)  and  any  assignee  of  its  said  demand  or  demands.  The  indebtedness  or  liability  of  the  pnncipal  debtor,  hereto- 
fore mentioned,  is  understood  to  include  habilities  orindehtedness  purchased  from  third  parties,  as  well  as  indebtedness  or  liablbly  as  principal, 
indorser,  guarantor  or  surety  for  others  or  for  a  firm  of  which  said  debtor  was  a  member  ivlien  such  indebtedness  accrued  or  was  " 
extended.  The  said  Bank  may  in  its  discretion  make  application  of  any  pavn.enis  made  by  the  pnncipal  debtor  or  us  or  either  of  ns,  or  which 
may  be  entitled  to  be  applied  on  any  indebtedness  or  liability  of  the  principal  debtor.  Notice  of  acceptance  of  this  guaranty  ot  any  default  ot  the 
debtor  is  waived. 

id  (Bank)  the  following  described  securities; 


5  collateral  s 


f  to  this  guaranty  I  have  depo; 


Assiftnment  as  Coilateral  Secarity  for 
any  IndebtedncBS  of  ThirdParty, 

This  assignment  specifically 
covers  certain  liabilities  which  it 
has  been  held  are  not  covered  un- 
less specially  mentioned:  (i)  In- 
debtedness of  firm  of  which  the 
debtor  is  a  member:  {2)  Indebted- 
ness or  liability  accruing  to  third 
parties  and  purchased  by  the  cred- 
itor: {3)  Transactions  accuring 
after  the  death  of  the  surety  and 
until  the  debtor  has  knowledge  of 
such  death:  (4)  Extension  of  time 
of  payment  or  renewals  granted  by 
the  creditor. 


Assig-nment  as  Collateral  Security  for  any  Indebtedness  of  Third  Party.  ^ 

In  consideration  of  the  sura  of  one  dollar  and  of  other  valuable  considerations,  the  receipt  whereof  is  here- 
by acknowledged,  I  hereby  sell,  assign,  transfer  and  set  over  to  B,  his  heirs,  executors,  administrators  and  as- 
signs, [follow  here  with  description  of  collateral  to  be  assigns].  But  this  assigraent  is  made  as  collateral  security 
for  the  payment  of  any  liability  or  indebtedness  whatever,  now  existing  or  which  may  hereafter  exist,  from  A  to 
B;  And  the  liability  or  indebtedness  hereby  secured  and  intended  to  be  secured  includes  that  of  A,  either  as 
maker,  indorser,  acceptor,  surety  or  guarantor  for  others  as  well  as  [himself];  and  on  instruments  or  accounts 
made  by  A  or  on  which  he  is  liable,  which  may  be  purchased  from  other  parties  as  well  as  those  made  directly  to 
or  with  B.  And  this  security  shall  apply  to  all  of  the  above  forms  of  liability  and  indebtedness  where  the  princi- 
pal indorser,  acceptor,  surety  or  guarantor  shall  be  a  firm  or  co-partnership  of  which  A  is  or  may  become  a  mem- 
ber. This  security  is  intended  as  a  continuing  security,  binding,  in  case  of  my  death,  my  heirs,  executors,  ad- 
ministrators and  assigns  as  to  all  transactions,  liability  and  indebtedness  incurred  before  my  death,  and  also  in- 
curred after  my  death,  until  actual  notice  of  my  death  shall  be  brought  to  B, 

The  extension  of  time  of  payment  or  the  renewal  of  any  of  the  forms  of  liability  or  indebtedness  heretofore 
mentioned  shall  in  no  way  release  me,  my  heirs  or  assigns,  nor  shall  the  release  of  any  other  security,  sureties, 
indorsers  or  guarantors  in  any  way  release  me,  my  heirs  or  assigns,  if  such  release  is  made  at  the  request  of  or 
with  the  consent  of  A. 

The  application  of  any  payments  on  the  indebtedness  or  liability  of  A,  to  B.  made  in  the  discretion  of  either 
of  them  is  hereby  confirmed.  Notice  of  acceptance  of  this  assignment  or  guaranty  or  of  any  default  thereunder 
is  waived.  Ail  of  the  foregoing  forms  of  liability  or  indebtedness  ceasing  to  exist,  this  assignment  may  be 
withdrawn  on  my  written  demand,  and  at  such  time  and  on  such  demand  B.  is  to  give  full  written  discharge  or  re- 
assignment hereof.  Witness  my  hand  and  seal       this  day  of       19    ,  at   [Seal.] 


Guaranty  of  Payment— To  be  Indorsed  on  Note. 

For  value  received,  I  hereby  guaranty  the  payment  at  maturity 
of  the  within  note  (or  instrument)  to  the  then  holder  thereof  or  his 
assigns,  together  with  all  costs  and  expenses  incurred  in  the  collection 
of  the  same  from  the  maker  and  myself,  or  either  of  us. 


Guaranty  of  Collection— To  be  Indorsed  on  Note. 

For  value  received,  I  hereby  guaranty  the  collection  of  the 
within  note  (or  instrument)  to  tlie  then  holder  thereoi  or  his  assigns^ 
together  with  all  costs  and  expenses  incurred  in  the  collection  of  the 
same  from  the  malter  and  myself,  or  either  of  us. 


Guaranty  of  Performance— To  be  Indorsed  on 
Lease  Bond,  Agreement  or  Other  Contract. 

For  value  received,  i  hereby  guaranty  to  the  legal  or  equitable 
owner  of  the  withm  contract,  his  heirs  or  assigns,  the  full  performance 
thereof  on  the  part  of  (A.  B.),  together  with  all  costs  and  expenses 
incurred  in  enforcing  siich  performance  from  A.  B.  and  myself,  or 
either  of  us. 


Guaranty  ot  the  Payment  ot  the  Honey  Part  of 
Contract,  Lease  or  Other  Agreement. 

For  value  received,  I  hereby  guaranty  the  payment  on  the  part 
of  (A.  B.)  of  the  sums  of  money  contracted  to  be  paid  by  him  in  the 
within  contract,  and  at  the  times  and  manner  therein  mentioned,  to- 
gether with  all  costs  and  expenses  incurred  in  collecting  the  same 
from  (A.  B,)  and  myself,  or  either  of  us. 


Waiver  of  Protest  with  Consent  to  Delay  Payment 

Presentation,  demand,  protest  and  notice  waived,  and  consent 
given  that  time  of  payment  of  this  instrument  may  be  delayed  oi 
extended  vnthout  prejudice  to  my  liability  as  indorser. 


Indorsement  Without  Recourse. 

Without  recourse  to  me,  and  without  impliedly  or  expressly 
warranting  any  of  the  matters  contained  in  or  which  go  to  the 
making  up  of  this  instrument. 


Bond;  Officer— Employee  of 
Bank,  Corporation  or  Firm. 


The  specific  points  covered  in  this  form 
are;  (i)  That  of  additional  or  changed  duties  of 
Employse:  (i)  Failure  to  take  new  bond  at  the 
expiration  of  the  first  term  of  empioyment; 
It  has  been  held  that  where  an  employee  of  a 
bank  gave  a  bond  in  which  he  was  mentioned 
as  bookkeeper  that  the  sureties  could  not  be 
held  if  he  defaulted  when  be  was  acting  as 
assistant  to  the  teller;  and  the  sanae  has  been 
held  where  a  bookkeeper  and  collector  in  a 
mannfacturing  concern  was  made  cashier  and 
hajidled  all  the  money  of  the  corporation  and 
was  temporarily  detailed  to  act  as  cashier: 
TJnleaa  carefnlly  worded  a  bond  expires  with 
fh»  origlul  term  of  emplorment. 


Indemnity  Bond:  Officer  or  Other  Kniployee  of  Bank,  Corporation  or  Firm, 

Know  all  men  by  these  presents,  That  we,  A.  B.  of  ,  and  C.  D,  of  ,  and  E,  F.  of  ,  are  held  and  firmly 

bound  unto  (The  Bank)  of  in  the  penal  sum  of  dollars,  lawful  money  of  the  United  States  of  America,  to  be  paid  to  the 

said  (The  ,  Bank,  its  sulccssofs  or  assigns)  for  which  payment,  well  and  truly  to  be  made,  we  bind  ourselves,  our  heirs,  executors  and  ad- 
ministrators firmly  by  these  presents.    Sealed  with  our  seals.    Dated  the  day  of         ,  one  thousand  hundred 

Whereas,  the  above  bounden  A.  B.  has  been  chosen,  appointed  or  elected  cashier  (or  general  clerk,  bookkeeper,  collector;  travelling  sales- 
man or  other  position,  naming  it)  of  the  said  (Bank,)  and  now  is  in  its  employ  in  some  capacity,  or  is  about  to  be  employed  by  the  said 

f  Bank)  in  some  capacity,  by  reason  whereof  he  will  receive  or  have  control  or  have  access  to,  or  be  chargeable  with  money,  property,  or 
other  things  of  said  (bank,)  and  others. 

Now,  the  condition  of  this  obligation  is  such  that-if  the  said  A.  B,,  his  executors  or  administrators,  shall  well  and  truly  serve  the  said 
(bank)  as  such  cashier  (or  other  officer  or  position,  naming  it)  during  his  continuance  in  office,  whether  by  reason  of  the  above  appointment  or 
election,  or  by  its  continuance,  or  by  a  subsequent  appointment  or  election  and  continuance,  and  well  and  truly  perform  and  discharge  all  his 
duties  as  such  officer  (or  employee),  and  shall  when  requested  by  said  (bank,)  its  agents,  successors  or  assigns,  account  for  and  pay  over  to  said 
(bank,)  its  agents,  successors  and  assigns,  all  money  and  property  with  which  he  is  chargeable,  as  such  officer  or  with  which  he  is  chargeable  by 
reason  of  having  improperly  taken  or  misapplied  any  of  said  (bank's)  money  or  property,  or  tor  which  it  is  liable,  outside  of  his  acts  or  duties  as 
cashier  (or  other  officer,  or  employee):  (to  the  end  that  this  bond  and  obligation  shall  also  be  a  security  to  said  bank,  its  successors  and  assigns,  for 
any  money  and  propertythat  may  come  into  the  hands  of  the  said  A.  B.  or  be  misapplied  by  him,  notwithstanding  the  fact  that  he  may  be 
directed  or  assigned  by  said  (bank),  its  successors  or  assigns  to  other  duties  than  those  contemplated  when  this  instrument  was  executed,)  then 
this  obligation  to  be  null  and  void :  otherwise  to  remain  in  full  force  and  effect  Notice  of  acceptance  of  this  bond  or  any  default  thereunder  is 
waived. 

 [S«l.] 

  [Seal.] 

'   '   [Seal.] 


Collateral  M^ote. 


The  Bpecific  provisions  in  this  form  are; 
I.  The  provision  that  "as  collateral  secur- 
?■  for  this  or  any  other  liability,"  etc.,  shall 


,9(ss  No.  E.  kep.  252;  McMaster's  Dec.  No. 
33^i)  that  the  usual  provision  as  to  the  collat- 
eral being  held  as  security  for  "any  other  in- 
debtedness" did  not  contemplate  liabilities 
purchased  of  third  parties. 

2.  The  provision  that  extenott  the  collateral 
to  firm  indebtedness,  etc.  It  hasbc"  icided 
that  security  for  "any  liability  what,.,er"of  an 
individual  did  not  cover  indebtedness  of  a  firm 
of  which  he  was  a  member;  nor  his  indorse- 
ment of  his  firm's  paper;  nor  would  it  secure 
an  indebtedness  held  by  a  firm  of  which  the 
creditor  was  a  member,    m  N.  Y.  180:  40  Ohio, 


3.  The  provision  for  renewals  and 
of  time  of  payment.     This  provisnj 
cept  where  the  collateral  i 


unnecessary  except  where  the  collateral  is  to 
cover  indorsements  or  engagements  for  other 
forties.  In  such  cases  it  has  been  held  that 
there  must  be  a  provision  for  such  renewals 
and  extensions.  46  N,  Y.  170;  25  N.  Y.  479.  68a,  69a 
4.  The  provision  as  to  eppUcatlon  o£  paj* 
ments. 


Vork,  19 


Collateral  Note. 

$    

 ,  tho  nndcrsfgnod,  for  valnorecelved  promlHo  to  pay  the 

Bank,  or  order  at    

Dollars  wtliilnterCHt  at  lltc  rate  of.  per  cent.  peraDuam. 

Having  deposited  with  said  bank  the  following  described  property ; 

as  collateral  security  for  thu  payment  of  this  or  any  otherlndebtedDesa,  liability  or  liabilities  of  the  nndereignsd  to  the  said  bank,  dne  or  to  become  due,  or  whfoh 
luay  hereafter  be  contracted  or  exlstinn  against  the  underi <^ued  ur  either  of  them.  The  liabilities  and  iadebtedueBS  herebv  secured  and  intended  to  be  secured  in- 
cludes that  of  maker,  indorser,  acceptor,  surety,  or  guurautur  fur  others  as  well  as  for  the  tmderalgned  or  either  of  theoi,  and  on  insirum-  uts  or  accoanta  which  mar  b 

Surchased  from  others  as  well  as  thuse  made  to  or  with  soidbuuk  or  for  tho  direct  benefit  o(  the  undersigned  or  eithpr  of  thinu:and  this  security  shall  apply  to  all  o 
la  above  mentioned  forms  of  liobtlity  or  indebtedness  where  thw  uiuker,  indorser,  acceptor,  surety,  orauarnntor  sbnll  be  a  lirm  on 
signed  or  either  of  them  is  then  a  member.  The  esteoaion  of  the  time  of  payiueutor  the  renewal  uf  any  of  the  furms  of  liability  or 
shall  in  no  way  release  the  undersigned  or  either  of  theuj.   The  release  of  any  other  security  to  uiy  of  the  abovu  uientiuned  furms 
la^  release  the  nndersl^ned  if  such  release  is  made  with  their  consent  or  the  consent  of  either  of  theoi. 


Si; 


The  undorsign  .  _ 

)  tothesuid  Buuitalien  II. 
1  b.'iiik  by  the  undersiguud,  and 

(1(1  the  uon-perfi  


Buy  agree    to  deposit  with  the 


tho 


   ofeithi 

 -h  additional  collateral  s  ^  

Ihd  liabilities  aforesaiil,  uponalllha  property  or  securities 
balance  of  tho  deposit  account  of  the  undersigned 


the  etLid  Bank  n 
the  snidBuu'k. 


 ,  .„e  foregfiug  agreeuicnls  as  to  furnishing  additional  collateral ,  1 

 .  .  _n  either  such  case  the  said  Bunk  is  hereby  autborizeil  t".-  sell,  assign,  and  deliver,  the  whole  or  any  pan  o: 

aduUiuus  thereto,  or  any  other  property  at  any  time  given  unto  or  left  in  Eho  possession  of  the  said  I  ank  by  the  nuucisiLii'  >  1 
broker's  board  or  at  publloor  private  sale,  at  the  option  of  the  said  Bank,  or  of  either  of  its  offlcera,  without  either  ailverii-Hrnn m  i 
waived.  If  such  securities  or  property  are  sold  at  public  snio,  tho  said  Bank  may  itself  purchase  tho  whole  or  any  part  tiieri'Mi.  fn.-i 
the  part  of  the  undersigned,  which  is  hereby  waived  and  released.  In  the  ease  olany  sui  h  sale  the  said  Hank  nmv  first  dcdnct  all  the 
deltiery.of  tho  property  or  so.  nrities  go  sold;  and  may  then  apply  the  residno  to  anyone,  or  morp,  or  all,  of  the  wild  liahilitiL-s,  whvt 
officers  shall  deem  proper,  making  proper  rebate  for  interest  on  liabilities  not  then  oue,  ond  relurniin;  the  overplus,  if  on  v.  In  tli 
liable  to  the  said  Bank  for  anv  deflrtency  arisiog  upon  any  such  sale.  The  undersigned  do  hereby  further  authorize  Iho  said  Bank 
propria te  and  apply  to  the  payment  of  any  of  the  said  liabilities,  whether  now  eiisflncor  hereafter  eoniracted.  any  ond  ail  moneys 
said  Bunk  on  deposit,  or  otherwise,  to  the  credit  of  orbelonginf!  to  the  undersigned,  whether  the  said  liabtlitieB  are  then  dne  or  not 
agree     that,  upon  any  transfer  of  this  note,  the  Bank  may  deliver  the  said  eoiraterals,  or  any  part  thereof,  t<i  tho  transferree,  who  sin 

an  the  powers  and  ri-*^  .  I  .  ,  ■■ 

or  responsibility  in  t 
undersignefi. 

The  undersigned  further  agree 
with  a  reasonable  attorney's  fee. 


i-paymeot  of  any  of  the  above  mentioned  liabilities,  to  pay  all  coat  of  collection 


_eit'herohta 
rho  shall  remain 

.  r-iirned  further 

  vested  with 

ra  aay  liability 
liLihUIty  of  the 

i  .orred,  together 


Bankers  Continuing-  Agreement 


The  matter  after  the  •  in  this  form  is  in 
addition  to  that  appearing  in  some  printed 
forms.      It  is  added  to  cover  the  follovfing 

1.  it  has  been  decided  that  security  for  any 
liability  of  an  individual  did  not  cover  indebt- 
edness of  a  firm  of  which  such  individual  was 
a  member;  nor  did  it  secure  his  individual  in- 
dorsement o£  his  firm's  paper  (McMaster's 
Dec.Xos.  46,47,65.) 

a.  It  has  been  held  that  the  ordinary  col- 
lateral agreement  accompanyinK  a  stock  col- 
lateral note  did  not  cover  paper  purchased 
from  third  parties,  unless  it  was  so  specifically 
stated.      (N.  Y.  tJt.  of  App.,  1B99.) 

3,  The  lien  of  collateral  as  security  tor 
others  would  not  attach  to  transactions  taking 

K lace  after  the  death  of  the  owner  of  the  col- 
iterul.  unless  sospecifically  stated,  even  if  the 
creditor  was  ignorant  of  such  death.  t^c- 
Master's  Dec  Nos.  49,  50. 

4.  Where  collateral  Jeft  to  secure  any  lia- 
bility of  a  third  party  has  once  attached  to  such 
liability,  the  extension  of  time  of  payment  or 
the  renewal  of  the  liability  will  release  the 
lien  of  the  collateral,  and  it  will  not  attach  to 
the  new  liability  unless  so  specially  provided. 
The  words  "to  secure  any  liability  whatever" 
will  not  of  themselves  cover  the  extended  or 
renewed  liability.  cMcMaster's  Dec.  Nos.  64-66) 


Banker's  Continaing  Agreement. 

Know  all  men  by  these  presents,  that  the  undersigned,  in  consideration  of  financial  accommodations  given,  or  to  be  given,  or  continued  to  the 
undersigned  by  the  Bank  hereby  agree  with  the  said  Bank  that  whenever  the  undersigned  shall  become  or  remain,  directly  or 

contingently,  indebted  to  the  said  Bank  for  money  lent,  or  for  money  paid  for  the  use  or  account  of  the  undersigned,  or  for  any  everdraft  or  upon 
any  indorsement,  draft,  guarantee  or  in  any  other  manner  whatsoever,  or  upon  any  other  claim,  the  said  Bank  shall  then  and  thereafter  have  the 
following  riehts,  in  addition  to  those  created  by  the  circumstances  from  which  such  indebtedness  may  arise  against  the  undersigned,  or  his,  or  their 
executors,  administrators  or  assigns,  namely: 

I,  Allsecurities  deposited  by  the  undersigned  with  said  Bank,  ns  collateral  to  any  such  loan  or  indebtedness  of  the  undersigned  to  said  Bank, 
shall  also  be  held  by  said  Bank  as  security  for  any  other  liability  of  the  undersigned  to  said  Bank,  whether  then  existing  or  thereafter  contracted;  ana 
said  Bank  shall  also  have  a  lien  upon  any  balance  of  the  deposit  account  of  the  undersigned  with  said  Hank  existing  from  time  to  time,  and  upon  all 
property  of  the  undersigned  of  every  description  left  with  said  Bank  for  sate  keeping  or  otherwise,  or  coming  to  the  hands  of  said  Bank  in  any  way, 
as  security  for  any  liability  of  the  undersigned  to  said  Bank  now  existing  or  hereafter  contracted. 

a.  Said  Bank  shall  at  all  times  have  the  right  to  require  from  the  undersigned  that  there  shall  be  lodged  with  said  Bank  as  security  for  all  existing 
liabilities  of  the  undersigned  to  said  Bank,  approved  collateral  securities  to  an  amount -.atistactory  to  said  Bank;  and  upon  the  failure  of  the  under- 
signed at  all  times  to  keep  a  margin  of  securities  with  said  Bank  for  such  liabilities  of  the  undersigned,  satisfactory  to  said  Bank,  or  upon  any  failure 
in  business  or  making  of  an  insolvent  assigment  by  the  undersigned,  then  and  in  either  event  all  liabilities  of  the  undersigned  to  said  Bank  shall  at 
the  option  of  said  Bank  become  immediately  due  and  payable,  notwithstanding  any  credit  or  time  allowed  to  the  undersigned  by  any  instrument 
evidencing  any  of  the  said  liabilities. 

3.  V\>^n  fiilluro  of  the  nndersli^ned  either  to  pny  any  iiidebtodnoss  to  sftid  Bank  when  becoming  or  made  due,  or  to  keep  up  the  margin  of  collateral  socuritieH 
above  pro. idbd  for,  then  and  In  eitberevent  said  Dank  may  Immediately  witliout  advertlsomeut,  and  without  uolice  to  the  undersigned,  tiell  any  of  the  securitien 
hold  by  it  as  against  any  or  all  of  the  liabilities  of  the  undersigned,  at  private  sale  or  Broker's  Board  or  otherwise  and  apply  the  nroteeds  of  such  sale  as  far  as  needed 
toward  tiie  payment  ol  any  or  all  of  such  liabilities  together  \vith  Interest  and  eiptnsys  of  sale,  lioldinK  the  undersiKneiT responsible  for  any  deficiency  remaining  un- 
paid after  sucu  application.  If  any  such  sale  he  at  Broker's  Board  or  at  public  auclion,  said  Bunk  m;iy  itself  be  a  purchaser  at  such  sate  free  from  any  right  or  ennlty 
or  redemption  oithe  undcrsiKned,  such  right  and  equity  being  hereby  expressly  waived  ami  released.  Upon  default  as  aforesaid,  said  Bank  may  also  apply  toward 
the  payment  of  the  said  liabilities  all  balances  of  any  deposit  account  of  the  undersii^iud  with  mwl  Bank  then  existing. 

It  is  further  agreed  that  these  presents  constitute  a  continuing  agreement,  upplyiuti  to  uuy  and  all  future  as  well  as  to  existing  transactions  between  the 
underslinied  and  said  Hunk. 

•■  And  the  liuliiliiies  or  iudelitedness  hereby  senired  and  in  tented  to  secured  includes  liability  or  indebtedness  either  as  maker,  Indorser,  acceptor,  surety  or 

cuiiniiiT'T  fi)r  iHli-TS  ns  well  iis  fur       ,  and  on  iiisirumeuis  or  accounts  wbiclimuy  be  purchased  Iron,  others,  nn  well  as  those  nude  to  or  with  said  bank  or  for 
ilir-ci  i..iiiiii;  1111.1  iliis  -  r  .iiriiv  ;iiul  afreeineut  abitU  Hiiply  to  ail  of  the  above  mentioned  forms  of  liublllty  or  indobtednesa  where  the  principal  maker,  indorser,  acceptor 
^.nr  -  ti  T  ^'^i.iriuiior  siiiiil  I"^  ;.  linii  i-r  cn' arinersbip  of  wlileh  or  either  ofusis  or  may  become  a  member, 

I  IMS  s.-i  iirnv  i-<  iiiNuili  ii  iis  it  rnntittuinii  security  bindlnoin  the  case  of  the  death  or  either  of  ,  our  heirs,  cxecntors,  admlnistmtors  and  assigns,  as 

■        -  -  ........      ,...11.3.    .  _ before  '   death  or  the  death  of  either  of  us,  bat  which  may  not  be  transferred  to  said  bank  nnttl  after  s"  ' 


The  i-:Heii?.i.iiiof  ilie  tim^  nf  [■iiviuent  or  the  renewal  nf  any  of  the  forms  of  .lability  or  indebtedness  heretofore  mentioned  shall  in  no  way  release  ,  our 

,  Iwirs,  -^lecutiirs,  adiiiinistriitors  and  assigns,  nor  shall  the  release  of  any  other  security,  sureties,  RUarantora,  indorsers,  makers  or  acceptors  in  any  way 
release  our  .  heirs,  executors,  administrators  "r  assigns,  if  such  releas-'  is  made  with  our  cimpent  or  the  "onsent  of  either  of  na.  Application  of  any 
payments  may  be  made  to  any  of  the  forms  of  indebtedness  or  liability  uf  the  undersigned  in  the  discretion  of  suld  Bank,    ■  LSeal.) 


Acknowledgment  —  Corporation  - 
All  States. 


This  form  of  acknowledgment  by  a  corporation, 
while  containing  much  that  is  not  needed  in  many 
states,  contains  all  o!  the  particular  requirements  of 
all  states 


ACKNOWLEDGMENT  — CORPORATION  — ALL  STATES. 

Sta"^^  of  — ■  I  To  wit: 

County  of  .-,  \ 

On  this  day  of  190     ,  before  me,  a  in  and  for  the  of  State  of 

personally  came  (Williatn  E.  Bonham),  known  to  me  to  be  such  identical  person,  and  known  to  me  to  be  the  president  of  the 
(naming  the  corporation),  and  at  the  same  time  personally  came  before  me  (Horace  Hemis)  known  to  me  to  be  such  identical 
person,  and  known  to  m;  to  be  the  secretary  of  the  (naming  the  corporation),  and  they  each  being  duly  sworn,  acknowledged, 
deposed  and  said  that  iliiL.-y  reside  in  the  of  ;  that  they,  each,  and  the  other,  were,  and  are,  respectively, 

the  officers  as  above  stati-d  of  the  (naming  the  corporation);  that  they  each  were  and  are  well  acquainted  with  the  common  or 
corporate  seal  of  the  (naming  the  corporation):  That  the  seal  hereto  affixed  is  such  seal  that  they  in  the  presence  nf  each  oihei 
affixed  such  seal  hereto  by  order  and  direction  of  the  (naming  Che  corporation),  and  by  order  and  direction  of  its  board  of  direc- 
tors ■  that  they,  in  the  presence  of  each  other,  signed  the  name  of  the  (naming  the  corporation)  hereto,  and  tlieir  names  a*^ 
officers,  respectively,  to  this  identure,  and  executed  and  delivered  it  by  order  and  direction  of  the  (naming  the  corporation)  and 
by  order  and  direction  of  its  board  of  directors,  and  that  all  such  act  and  acts  they  did  as  the  free,  voluntary  deed,  act  and  acts 
of  the  (naming  the  corporation),  and  as  their  free,  voluntary  deed,  act  and  acts,  and  for  the  uses  and  purposes  therein  set  forth, 
and  that  the  name  of  each  as  applied  to  this  instrument  is  in  the  proper  handwriting  of  each. 

In  testimony  whereof  1  have  hereunto  set  my  hand  and  official  seal  this        day  of        1902,  at        in        the  of 

[SEAL]  ^      ,   -  

^  ^  Official  Tille  

(There  should  ue  two  witnesses  to  the  execution  Residing  at    

of  the  instrument).  My  Commission  Expires  


This  form  of  acknowledgment  by  a  wife, 
-vhile  containing  much  that  is  not  needed  in 
many  states,  contains  all  that  is  needed  in  any 
state. 


ACKNOWLEDGMENT— WIFE— ALL  STATES. 


State  of — 
County  of- 


■  To  wit : 


I,  ,  a  in  and  for  the  do  hereby  certify  that  on  the  day  of  190 

came  before  me,  known  to  me  to  be  such  identical  person,  and  known  to  me  to  be  of  full  age,  and  known  by 

me  to  be  the  wife  of  ,  who,  being  examined  by  me  separate  and  apart  from  her  husband  touching  her  signature 

10  and  voluntary  execution  of  the  within  instrument,  the  contents  of  tlie  same  having  been  made  known  to  her  by  me,  acknow- 
ledged to  me  that  she  executed,  signed,  sealed  and  delivered  [he  same  as  her  act  and  deed,  and  for  tlie  purposes  and  consideration 
therein  expressed  ;  that  she  executed  the  same  freely,  understandingly  and  voluntarily,  without  fear,  constraint,  compulsion,  or 
dread  of  displeasure  or  undue  influence  of  her  husband  or  any  other  person  ;  that  she  doth  still  voluntarily  assent  thereto  and  is 
still  satisfied  therewith  as  her  act  and  deed,  and  does  not  wish  to  retract  the  execution  of  the  same,  and  doth  renounce,  release, 
and  forever  relinquish  to  the  within  named  grantee,  ,  his  heirs  and  assigns,  all  her  interest  and  estate,  and  also  all 

her  right  and  claim  of  dower,  of,  in,  or  to  all  and  singular  the  premises  within  mentioned  and  released. 

In  testimony  and  witness  whereof  I  have  aflSxcd  my  official  seal  this         day  of  190    ,  at         in  the  of 


[SEAL] 


(There  should  lie  two  witnesses  to  the  execution 
of  the  instrument). 


Official  Title.. 
Residing  at.. 
My  Commission  Expires. 


This  form  of  acknowledgment,  while  con- 
taining much  that  is  not  needed  in  many 
states,  contains  all  that  is  needed  in  any  State. 


To  wit: 


Acknowledgment  —  All  States. 

State  of... 
County  of-- 

^  a  ,  in  and  for  ,  do  hereby  certify  that  on  the  day  of  ,  personally  appeared  before  ,  known  by  me 
to  be  such  identical  person,  and  after  I  had  made  known  to  him  the  contents  of  the  foregoing  instrument,  he  acknowledged 
that  he  executed,  signed,  sealed  and  delivered  the  said  instrument  bearing  date  as  his  free  and  voluntary  act  and  deed,  for 
the  uses,  purposes  and  consideration  therein  expressed,  and  prays  that  it  m.iy  be  admitted  to  record  : 


In  testimony  and  witness  whereof,  I  have  affixed  my  official  seal  this 


day  of 


1902,  at 


in  the 


of 


Official  title. 

(There  should  be  two  witnesses  to  the  Residence  - 

execution  of  the  instrument.)  My  commission  expires. 


Bank  Account: 

Deposit  Payable  to  Either  of  Two 
Persons. 


fin 


In  opening  the  account  the  title  of  the  account  in  the  pass  book  might  be  '*  Helena  Roche  or  Henry  Schwoon  ;  Payable 
to  Either  or  Survivor."  At  the  time  of  opening  the  account  Helena  Roche  and  Henry  Schwoon  would  sign  the  following 
writing, —  which  might  appear  in  the  signature  book  or  elsewhere  : 


"We,  Helena  Roche  and  Henry  Schwoon,  do  hereby  open 
and  direct  (he  Bank  lo  open  an  account  with  us  in  the  na 

Survivor,"  or  under  such  other  designation  : 
agree  with  each  other  to  become  and  be  cop; 
and  o(  al!  moneys  hereafter  lo  be  deposited 
them  may  at  any  and  all  times  draw  and  rece 
authorized  and  empowered  to  sign  their  res] 
voucher  for  (he  moneys  so  drawn." 


unt  with  the  Bank  and  do  hereby  authorize,  empower 

Helena  Roche  and  Henry  Schwoon,  Payable  to  Either  or  the 
lid  bank  may  employ,  and  we,  the  said  Helena  Roche  and  Henry  Schwoon,  do  hereby 
ers  in  the  ownership  of  said  moneys,  and  of  all  accrued  and  accruing  interest  thereon, 
said  account ;  and  it  is  agreed  that  each  and  either  of  said  parties  and  the  survivor  of 
from  said  bank  the  whole  or  any  part  of  said  moneys,  and  that  each  of  said  parties  is 
ive  names  of  Helena  Roche  or  Henry  Schwoon  to  any  receipt,  check,  draft,  or  other 


The  above  form  protects  the  banks  in  paying  to  either  aftei 
to  the  survivor  of  what  their  respective  interests  are.    If  the  di 
balance  "he  writing  could  read  :    "We,  Helena  Roche  and  Henry  Sch' 
the  Bank,  in  the  name  of  or  such  other  name  and  title  a 

made  by  either  of  us  to  said  account  or  any  interest  accrued  or  credited  thereto  shall  be  and 
or  after  the  death  of  the  other,  may  sign  checks,  drafts  or  orders  on  said  account  and  receive  thi 


and  at  the  death  of  either  the  s 


r  shall  take  abso! 


death  of  the  other,  but  it  is  not  much  evidence  to  the  heirs  of  the  deceased  or 
lors  wish  to  make  the  deposit  so  that  the  survivor  can  take  and  hold  the  entire 
n,  declare  that  we  are  joint  owners  of  the  money  this  day  deposited  in 
d  bank  may  designate,  and  we  further  declare  that  any  further  deposits 
joint  property  ;  that  is,  either  one  of  us,  before 
ney  thereon  before  or  after  the  death  of  the  other, 


and  single  ownership  of  the  balance  then  due  the  3 


nt. 


Guaranty  of  Collateral  Note. 
In  consideration  of  one  dollar  paid  to  the  undersigned,  the  receipt  of 
which  is  hereby  acknowledged,  and  of  the  making,  at  the  request  of  the 
undersigned,  of  the  loan  evidenced  by  the  within  note  and  contract,  the 
undersigneo  Hereby  jointly  and  severally  guarantee  to  the  National  Bank  of 
in  New  York,  its  successors,  endorsees  or  assigns  the  punc- 
tual payment,  at  maturity,  of  said  note  and  contract  and  of  the  said  loan,  and 
hereby  assent  to  all  the  terms  and  conditions  of  the  said  note  and  contract, 


expressly  agreeing  that  so  long  as  the  maker  is  bound  by  said  note  and  con- 
tract and  the  conditions  therein  contained  that  we  will  remain  bound, — 
waiving  any  defences  that  the  maker  or  makers  could  not  maintain  as  maker. 

The  undersigned  hereby  waives  demand  of  payment,  and  also  waives 
the  protest,  and  notice  of  protest  of  the  within  note. 


96.    Assignment  of  Account. 

In  consideration  of  dollars  to  me  paid  by  of  ,  llie  receipt  of  which  is  hereby- 
acknowledged,  I  do  hereby  sell,  assign,  transfer  and  set  over  to  the  said  ,  his  executors, 
administrators  and  assigns,  the  annexed  account  [or.  bill],  and  all  sums  of  money  now  due  or  to 
become  due  upon  the  same,  and  upon  any  and  all  of  the  items  therein  mentioned,  together  with 
all  my  right,  title  and  interest  therein,  and  I  hereby  certify  that  the  various  entries  in  said  account 
are  correct  and  that  the  balance  slated  as  due  is  due.  And  I  hereby  authorize  the  said  in  my 
name,  or  in  his  own,  but  at  his  own  cost,  to  take  all  necessary  and  proper  legal  measures  to  col- 
lect, receive  and  enjoy  the  same. 

Witness  my  hand  and  seal  this         day  of         ,  lo     ,  at 

  [Seal.] 

[Signature.] 

For  fom  of  acknowh  dgment  see  "  Acknowledgment." 

If  the  assi;rnment  is  of  various  accounts,  it  should  tnention  them  by  name  and  amount,  as 
near  as  may  be.  for  the  purpose  of  identification,  or  it  should  refer  lo  an  annexed  schedule  where 
they  are  so  listed. 

87.   Affidavit  to  Account  by  Individual  Creditor. 

State  of   ) 

Couniyof  ,  f 

1,  A.  B.  C.  being  duly  sworn,  do  depose  and  say  as  follows  :  The  foregoing,  [01,  annexed] 
account  is  a  true  and  jusi  statement  of  the  account  of  with  me,  as  shown  by  my  books  of 
original  entry,  which  I  know  to  be  correct. 

For  form  of  acknowledgment,  see  "  Acknowledgment." 

[S'ignature.] 


88.   Affidavit  to  Account  by  Partner. 

State  cf  _   )  „  , 

County  of  -,  ^ 

I,  A.  B.  C.  being  duly  s«'orn,  do  depose  and  say  as  follows ;  I  am  one  of  the  general  part" 
ners  of  the  firm  of  ,  doing  business  under  that  name  at  ;  1  caused  the  foregoing  [or, 

annexed]  account  to  be  prepared  from  the  books  of  original  entry  of  said  firm,  and  I  have  com- 
pared said  account  with  such  original  entries,  and  know  it  to  be  a  true  and  just  statement  of  6uch 
entries  and  all  of  them,  and  that  the  balance,  as  stated,  is  due  and  unpaid. 

For  form  of  acknowledgment,  see  "Acknowledgment." 


[Signature,  iodividaal.] 

89.    Affidavit  to  Account  by  Officer  or  Employee. 

State  of    ,   )  , 

Coumy  of  ,  T"^'- 

I,  A.  B.  C,  of  ,  being  duly  sworn,  do  depose  and  say  as  follows  ;    I  am  the  bookkeeper 

[or  other  officer  or  employee]  of  .  I  made  up  the  annexed  [or,  foregoing]  account  from  (he 
books  of  original  entry  of  ,  and  I  know  [or,  believe]  that  the  said  original  entries  were  cor- 
rectly made,  and  know  that  the  annexed  [or,  foregoing]  account  is  a  true  statement  of  such  entries, 
and  of  all  of  them. 


For  form  of  acknowledgment,  see  "  Acknowledgment."* 


[Signature.] 


97*   Assignment  of  Wages. 


For  value  received,  I  do  hereby  sell,  assign,  transfer  and  set  over  to  A-  B.  C.  of  ,  any 

and  all  sums  of  money  due,  or  coming  due,  to  me  from  D.  E.  F.  of  ,  as  wages  for  my 
services  as  [describe  services]  between  the  day  of  ,  19  .  and  the  day  of  »  19  . 
And  I  hereby  authorize  said  A.  B.  C.,  or  his  assigns,  to  demand,  collect,  receive  and  receipt  for 
the  s'ime  or  any  part  thereof,  and  if  said  sum,  or  any  part  thereof,  should  be  paid  to  me,  or 
slioiild  co'iie  into  my  hands,  I  will  receive  the  same  solely  as  the  agent  of  A.  B.  C,  and  will  trans- 
11  It  ihe  same  forthwith  to  him. 

Witness  my  hand  this         day  of         ,  19   ,  at 


98.   Assignment  by  a  Corporation. 

Know  all  men,  that  the  A.  B.  C.  Company,  of  ,  a  corporation  orRanized  under  the  laws 
of  the  Siaie  of  ,  in  pursuance  of  a  resoluiion  of  the  Board  of  Directors  of  said  company, 

passed  on  the  day  of  .  19    .  in  consideration  of  dollars,  to  it  paid  by  D,  E.  F. 

of  ,  the  receipt  whereof  is  hereby  acknowledged,  does  hereby  sell,  assign,  transfer  and  set 

over  to  said  D.  E.  F.  and  his  assigns,  all  [full  description  of  all  property  assigned]. 

In  witness  whereof,  the  said  company  has  caused  these  presents  to  be  signed  in  its  name,  by 
its  president,  and  sealed  with  its  corporate  seal,  attested  by  its  secretary,  this  day  of  , 
ig     ,  at  . 

A.  B.  C.  Company,  by  G.  H.  I.,  President. 
[Corporate  seal.]  Attest :    J.  K.  L.  Secretary. 

For  form  of  acknowledgment,  see  "Acknowledgment." 


93.   Assignment  as  Collateral  for  Debt  of  Maker. 


In  consideration  of  the  sum  of  one  dollar  and  of  other  valuable  considerations  I  hereby  sell, 
assign,  transfer  and  set  over  to  ,  his  heirs,  executors,  administrators  and  assigns,  [here 
describe  the  collateral  lo  be  assigned]. 

But  this  assignment  is  made  as  collateral  and  additional  security  for  Ihe  payment  of  [follow 
with  a  description  of  the  note,  or,  if  not  a  note,  with  a  description  of  the  principal  debt  to  be 
secured],  and  such  note  [or  debt]  being  paid  this  assignment  is  to  be  void,  and  the  patty  of  the 
second  part  agrees  to  cancel  the  same  of  record,  if  recorded,  and  deliver  the  same  to  the  party  of 
the  first  part. 

Witness  my  hand  and  seal  this         day  of         i  lO     1  at 

  [Seal.] 

[Signature.] 

For  form  of  acknowledgment,  see  "  Acknowledgment." 


92.   Assignment — General. 

In  consideration  of  the  sum  of  dollars,  to  me  paid  by  C.  D.,  of  .  the  receipt 
whereof  is  hereby  acknowledged,  I  liereby  sell,  assign,  transfer  and  set  over  to  the  said  C.  D.,  his 
executors,  administrators  and  assigns  [here  describe  the  instrument  assigned],  together  with  the 
money  due  and  10  grow  due  thereon.  And  I  hereby  covenant  that  there  is  due  and  unpaid 
thereon  the  sum  of         dollars,  and  interest  on  such  sum  from  .  , 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  the  day  of  .  19  - 

A.  B.  [Seal.] 

For  form  of  acknowledgment,  see  '■  Acknowledgment." 


108.   Assignment  of  an  undivided  one-half  interest  in  an  invention 
before  the  issue  of  letters  patent. 

Whereas  I,  A.  B.,  of  L.,  county  of  M.,  State  of  N.,  have  invented  a  certain  new  and  useful 
improvement  in  harvesters  [giving  title  of  the  same],  for  which  I  am  about  to  malte  application 
for  letters  patent  of  the  United  Slates;  and  whereas  G.  D.,  of  R.,  county  of  S.,  State  of  N.,  is 
desirous  of  acquiring  an  interest  in  said  invention  and  in  the  letters  patent  to  be  obtained  therefor  : 

Now,  therefore,  to  ail  whom  it  may  concern,  be  it  known  that,  for  and  in  consideration  of  the 
sum  of  dollars  to  me  in  hand  paid,  the  receipt  of  which  is  hereby  acltnowledged,  I,  the  said 
A.  B.,  have  sold,  assigned,  and  transferred,  and  by  these  present  do  sell,  assign,  and  transfer 
unto  the  said  G.  D.  an  undivided  one-half  right  to  the  said  invention,  as  fully  set  forth  and  de- 
scribed in  the  specification  prepared  and  executed  by  me  on  the  day  of  ,  19  ,  pre- 
paratory 10  obtaining  letters  patent  of  the  United  States  therefor ;  and  I  do  hereby  authoriie  and 
request  the  Commissioner  of  Patents  to  issue  the  said  letters  patent  to  A.  B.  and  G.  D. 

In  testimony  whereof  I  have  hereunto  set  my  hand  and  afflsed  my  seal  this  41h  day  of  May 
A.  D.  19  . 

,  ,  A.  B.  [Seal.] 

Id  presence  of  —  i  -J 

O.  P. 

S,  T. 


109.   Assignment^of  the  entire  interest  in  letters  patent. 

Whereas  I,  A.  B.,  of  L.,  county  of  M.,  State  of  N.,  did  obtain  letters  patent  of  the  United 
States  for  an  iinprovement  in  car-wheels,  which  letters  patent  are  numbered  ,  and  bear  date 

the  Slh  day  of  June,  in  the  year  19  ;  and  whereas  1  am  now  the  sole  owner  of  said  patent  and  of 
all  rights  under  the  same  ;  and  whereas  E.  F.,  of  R.,  county  of  S.,  State  of  N.,  is  desirous  of 
acquiring  the  entire  interest  in  the  same  : 

Now,  therefore,  to  all  whom  it  may  concern,  be  it  known  that,  for  and  in  consideration  of  the 
suni  of  dollars  to  me  in  hand  paid,  the  receipt  of  which  is  hereby  acknowledged,  I,  the  said 
O.  U.  have  sold  assigned,  and  transferred,  and  by  these  presents  do  sell,  assign,  and  transfer 
unto  the  said  E  F  the  whole  right,  title,  and  interest  in  and  to  the  said  improvement  in  car-wheels 
and  in  and  to  Ihe  letters  patent  therefor  aforesaid  ;  the  same  10  be  held  and  enjoyed  by  the  said 
E  F  ,  for  his  own  use  and  behoof,  and  for  the  use  and  behoof  of  his  legal  representatives,  to  the 
tun  end  01  the  term  lor  which  said  letters  patent  are  or  may  be  granted,  as  fully  and  entirely  as 
the  same  would  have  been  held  and  enjoyed  by  me  had  this  assignment  and  sale  not  been  made, 
together  with  all  my  right,  title  and  interest  in  and  to  damages,  profits,  royalties  and  recoveries  for 
past  infringements  of  said  letters  patent,  together  with  the  right  to  sue  for  and  collect  the  same  to 
his  own  use.  by  proper  legal  proceedings  in  his  own  name  or  otherwise. 

In  testimoiiy  whereot  I  have  hereunto  set  my  hand  and  affined  my  seal  at  L.,  in  the  county  of 


M.  and  State  of  N.,  this  25th  day  of  July,  A.  D.  19 


A.  B.  [Seal.] 


In  presence  of  — 
N.  P. 
O.  T. 

It  will  he  noticed  that  the  above  assignment  includes  the  right  to  collect  damages  for  previous 
infringements.  This  right  does  not  follow  the  mere  assignment  of  the  letters  patent,  and  the  clause 
giving  such  right  does  not  appear  in  the  usual  printed  assignments. 


no.    Assignment  of  an  undivided  interest  in  letters  patent. 


127.   Bond  of  Indemnity ;  To  Bank  in  Paying  Lost  Check. 


Whereas,  I,  A.  B.,  of  L.,  county  of  M.,  State  of  N..  did  obtain  letters  patent  of  the  United 
States  for  an  improvement  in  hay-rakes,  which  letters  patent  are  numbered  .and  bear  date 

the  3d  day  of  August,  in  the  year  ig  ;  and  whereas  C.  D.,  of  R.,  county  of  S.,  State  of  N.,  is 
desirous  of  acquiring  an  interest  in  the  same  ; 

Now,  therefore,  to  all  whom  it  may  concern,  be  it  known  that,  for  and  in  consideration  of  the 
sum  of  dollars  to  me  in  hand  paid,  the  receipt  of  which  is  hereby  acknowledged,  I,  the  said 
A.  B.,  have  sold,  assigned,  and  transferred,  and  by  thftse  presents  do  sell,  assign,  and  transfer 
unto  the  said  D.  E.  the  undivided  one-half  part  of  the  whole  right,  title,  and  interest  in  and  to  the 
said  invention  and  in  and  to  the  letters  patent  therefor  aforesaid ;  the  said  undivided  one-halt  part 
to  be  held  and  enjoyed  by  the  said  C.  D.,  for  his  own  use  and  behoof,  and  for  the  use  and  behoof 
of  his  legal  representatives,  to  the  full  end  of  the  terra  for  which  said  letters  patent  are  or  may  be 
granted,  as  fully  and  entirely  as  the  same  would  have  been  held  and  enjoyed  by  me  had  this 
assignment  and  sale  not  been  made. 

In  testimony  whereof  I  have  hereunto  set  my  hand  and  affixed  my  sea!  at  L.,  in  the  county  of 
M.,  aud  State  of  N.,  this  7th  day  of  June,  A.  D.  19  . 

In  presence  of—  A.  B.  [Seal.] 

N.  P. 
O.  T. 


Know  all  men  by  these  presents.  That  we.  A.  B.  of  ,  and  C.  D.  of  ,  are  held  and 
firmly  bound  unto  Bank  [state  the  technical  corporate  title]  in  the  sum  of  dollars, 
lawful  money  of  the  United  States  of  America,  to  be  paid  to  the  said  Bank,  or  to  iis  certain 
attorney,  or  assigns:  to  which  payment  well  and  truly  to  be  made,  we  bind  ourselves,  our 

heirs,  executors  and  administrators,  firmly  by  these  presents. 

Sealed  with  our  seals.  Dated  the  day  of  ,  in  the  year  of  our  Lord,  one  thousand 
nine  hundred. 

The  condition  of  this  obligation  is  such.  That,  Whereas,  the  said  Bank,  at  the  request 

of  A.  B.,  did  on  or  about  ,  issue  its  check  for  dollars  on  the  Bank  of  , 

dated  ,  and  payable  to  the  order  of         ,  wliich  check  is  said  to  h;«ve  been  lost  before  being 

presented  for  payment,  and  whereas  the  said  bank  has  issued  its  duplicate  check  in  lieu  of  said 
lost  check  [or  has  paid  to  A.  B.  the  sum  of  dollars  in  payment  of  such  check]  on  the  agree- 
ment that  this  bond  would  be  given. 

If,  therefore,  the  said  A.  B.  and  C.  D..  iheir  executors  or  administrators,  or  either  of  them, 
shall  and  do  deliver  up  the  said  check  unpaid,  when  it  shall  be  found,  to  the  said  bank  or  its 
assigns,  to  be  cancelled,  and  until  the  same  shall  be  so  delivered  up  and  cancelled,  save,  defend, 
keep  harmless,  and  indemnify  the  said  bank  or  its  assigns,  and  their  goods  and  chattels,  lands 
and  tenements,  of  and  from  the  said  check,  and  of  and  from  all  actions,  suits,  payments,  costs, 
charges  and  damages,  for  or  by  reason  thereof  ;  then  this  obligation  to  be  void,  or  else  to  be  and 
remain  in  futi  force  aad  virtue. 

  [Seal] 

 '  [Seal.] 

For  form  of  acknowledgment,  see  "Acknowledgment." 


Bills  of  Sale  — chattel  Mortgage. 

A  bill  of  sale  is  an  instrument  in  writing  which  is 
evidence  of  ihe  transfer  of  personal  property.  They 
are  seldom  used  in  ordinary  transactions  of  bona 
fide  sales,  as  the  delivery  of  the  property  is  usually 
sufficient  evidence  of  title. 

Given  as  Security. — Where  bills  of  sale  are  given 
as  security  —  no  mailer  how  absolutely  they  may  be 
worded  as  evidencing  a  sale — they  should  be  exe- 
cuted and  recorded  in  every  respect  as  a  chattel 
mortgage,  as  thai  is  what  they  then  are.  (See  Chattel 
Mortgage.)  52  Minn.  497;  63  Wis.  3.19;  55  Md. 
419 ;  45  N.  J.  Eq.  208 ;  89  Mich.  357 ;  24  Ala.  355  ; 
130  N.  Y.  327, 


116.    Bills  of  Sale  — To  Be  Recorded  Both  as  Chattel  and  a  Real  Estate  Security. 

Know  all  men  by  these  presents.  That  I,  A.  B.  of  ,  of  the  first  part,  for  and  in  consideration  of  the  sum  of  dollars,  lawful  money 
of  the  United  Stales,  to  me  in  hand  paid,  at  or  before  the  ensealing  and  delivery  of  these  presents  by  C.  D.,  of  ,  of  the  second  part,  the 

receipt  whereof  is  hereby  acknowledged,  have  bargained  and  sold,  and  by  these  presents  do  grant  and  convey  unto  the  said  parly  of  the  second 
part,  his  executors,  administrators  and  assigns  "one  Johnson  planer  No.  4,  one  Williams  Morticing  Machine  No.  i,  one  Raymond  Belt  Saw  No. 
3,  one  Hammond  Engine  No.  2."  "  All  of  which  are  now  used  by  me  in  my  mill  on  Water  street,  and  which  it  is  agreed  shall  remain  there  and  be 
used  by  me  until  October  first  next."  To  have  and  to  hold  the  same  unto  the  said  party  of  the  second  part,  his  executors,  administrators  and 
assigns  forever.  And  I  do  for  myself,  my  heirs,  executors  and  administrators,  covenant  and  agree,  to  and  with  the  said  party  of  the  second  part, 
to  warrant  and  defend  the  sale  of  the  said  property  hereby  sold  unto  the  said  party  of  the  second  part,  his  executors,  administrators  and  assigns, 
against  all  and  every  person  and  persons  whomsoever. 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  the         day  of         ,  in  the  year  one  thousand  hundred  and 

 -   [Seal.] 

For  form  of  Acknowledgment,  see  "Acknowledgment," 

The  foregoing  bill  of  sale  should  be  recorded,  as  immediate  possession  is  not  to  be  taken  by  the  purchaser. 

It  should  be  recorded  both  as  a  real  estate  mortgage  and  as  a  chattel  mortgage,  for  the  reason  that  if  the  engine  or  machines  are  affixed  to  the 
building  in  a  certain  way  —  and  in  juat  what  way  the  courts  differ  —  then  they  are  deemed  to  be  a  part  of  the  realty.  This  course  should  be  fol- 
lowed if  the  instrument  was  drawn  as  and  called  a  chattel  mortgage. 

Machinery,  which,  from  its  nature,  requires  to  stand  on  a  foundation,  or  be  bolted  to  the  floor,  or  attached  to  the  building,  before  it  can  bo 
properly  operated,  is  usually  deemed  to  be  a  part  of  the  real  estate;  and  when  so  placed  it  would  probably  be  covered  by  any  existing  mortgages 
on  the  mill  or  the  real  estate,  and  such  existing  mortgage  would  probably  have  precedence  over  a  bill  of  sale  or  chattel  mortgage. 


126.   Bond  to  Indemnify  for  Paying  a  Lost  Note. 

Know  all  men  by  these  presents.  That  we,  A.  B.  of  ,  and  C.  D.  of  ,  are  held  and 
firmly  bound  unto  £.  F.  of  ,  in  the  penal  sum  of  .  dollars,  lawful  money  of  the  United 

Sl.iies  of  AmTica,  to  be  paid  to  (he  said  E.  F.,  his  executors,  administrators  or  assigns  :  for  which 
pavinent,  well  and  truly  to  be  made,  we  bind  ourselves,  our  heirs,  executors  and  administrators, 
firmly  by  these  presents.  Sealed  with  our  seals.  Dated  the  day  of  ,  one  thousand 
nine  hundred 

Whereas  A.  B.  is  the  owner  of  a  certain  promissory  note  for  dollars,  dated  ,  and 
payable  after  date,  signed  by  C.  D.,  and  payable  to  the  order  of         ,  and  which  said  note 

is  losl  or  destroyed  and  cannot  now  be  produced  by  him  ;  and  whereas  C,  D.  has  this  day  paid  to 
A.  B.  the  full  amount  due  on  said  note  upon  the  agreiiuienl  thai  [his  bond  of  indemnity  would  be 
given,  and  that  A.  B.  will  indemnify  and  save  said  C  D.  harmless  in  the  matter,  and  will  deliver 
up  said  note  to  C.  D.  when  found  :  Now  the  condition  of  this  obligation  is  such,  that  if  the  above 
bound-n  A  B.  and  C.  D.,  their  heirs,  executors,  administrators,  or  any  of  them,  shall  well  and 
truly  indemnify  and  save  harmless  the  said  E.  F.,  his  executors  and  administrators,  from  and 
against  the  said  note  and  any  and  all  damages,  costs,  charges  and  expenses  and  all  actions  or 
suits,  whether  groundless  or  otherwise,  by  reason  of  said  note,  and  also  deliver  or  cause  said  note 
to  be  delivered  to  said  E.  F.  when  found,  then  this  obligation  is  to  be  void  ;  otherwise  to  remain 
in  full  force  and  efiecL 

  [Seal.] 

[Signature.] 

[Seal.] 


For  form  of  acknowledgment,  see  "Acknowledgment." 


[Signatnrt 


219-   Power  of  Attorney. 

Know  all  men  by  these  presents,  that  I.  A.  B.,  of  ,  in  the  county  of  ,  and  State  of 
,  have  made,  constituted  and  appointed,  and  by  these  presents  do  make,  constitute  and 
appoint  C.  D.,  of  ,  in  said  county  my  true  and  lawful  attorney  for  me  and  in  my  name,  placu 
and  stead  to  transact  any  business  in  which  I  am,  or  may  become  interested,  in  such  manner  and 
to  such  extent  as  he  may  deem  advisable,  and  to  manage,  control,  operate,  sell,  mortgage,  pledge, 
and  use  any  and  all  property  which  I  now  have,  or  which  I  may  hereafter  in  any  way  acquire;  and 
to  purchase  for  me  such  property  and  things,  real  or  personal,  as  he  may  deem  advisable,  or  to 
deal  in  and  exchange  the  same,  and,  generally,  to  manage,  control  and  conduct  all  my  business, 
property  and  affairs;  and  to  that  end.  and  as  incident  to  the  above  mentioned  authority,  my  said 
attorney  is  authorized  to  sign,  endorse,  draw,  accept,  make,  execute,  and  deliver  all  such  notes, 
checks,  bills  of  exchange  and  othe.  contracts  or  instruments  in  writing  with  o  without  seal,  and 
also  to  sign  my  name  as  attorney  to  any  transfer  of  any  stocks,  bonds  or  othe  .  securities  whatso- 
ever, or  agreements,  or  papers  or  paper  writings,  and  to  make  such  verbal  contracts  as  he  may 
deem  proper  in  my  name  regarding  the  matters  hereby  authorized,  and  as  and  when  he  deems 
proper,  giving  and  granting  unto  my  said  attorney  full  power  and  authority  to  do  and  perform  all 
and  every  act  and  thing  whatsoever  requisite  and  necessarv  to  be  done  in  and  about  the  premises 
as  fully  to  all  intents  and  purposes  as  I  might  or  could  do  if  personally  present,  with  full  power 
of  substitution  and  revocation,  hereby  ratifying  and  confirming  all  that  my  said  attorney  or  his 
substitute  sh;iU  lawfully  do  or  cause  to  be  done  by  virtue  hereof. 

In  witness  whereof,  1  have  hereunto  set  my  hand  and  seal  the  day  of  ,  in  the  year 
one  thousand  nine  hundred. 

Sealed  and  Delivered  in  the  presence  of  — 

-  I.H.  A.  B.  [Seal.] 

For  form  of  Acknowledgment,  see  "Acknowledgment." 


220.    Power  of  Attorney  to  Draw  Dividend. 


Know  all  men  by  these  presents,  that  I,  A.  B.,  of  ,  in  the  county  of  ,  and  State 

of  ,  do  authorize,  cunstilule  and  appoint  C.  D.,  of  said  ,  my  true  and  lawful  attorney, 

in  my  name,  place  and  stead  to  receive  from  the  the  dividend  now  due  me  or  which  may  be 
due  me  prior  to  ,  on  all  stock  standing  in  my  name  on  the  books  of  the  said  and  receipt 
for  the  same  hereby  ratifying  and  confirming  all  that  may  lawfully  be  done  in  ihe  premises  by 
virtue  hereof. 

Witness  my  hand  and  seal  this         day  of         .  190  . 
Sealed  and  Delivered 
in  the  presence  of 

E.  F.  A.  B.  [Seal.] 

222.   Power  of  Attorney— Financial, 

Know  all  men  by  these  presents,  that  I,  A.  B.,  of  ,  in  the  county  of  ,and  State 
of  ,  have  made,  constituted  and  appointed,  and  by  these  presents  do  make,  constitute  and 
appoint  C.  D.  of  said  .  my  true  and  lawful  attorney  for  me  and  in  my  name,  place  and 
Et:ad,  to  make,  sign,  draw  and  deliver  any  bank  check  or  checks  on  any  bank,  banker  or  (rust 
com  jany  with  whom  I  keep  an  accnuni,  whether  against  funds  actually  at  the  time  standing  10  my 
creon  Of  against  or  in  anticipation  of  deposits  to  be  made  or  funds  to  be  pla  ed  to  my  credit  there- 
after:  to  cndor<ie  I.t  lieposii  and  c.illcction  any  and  all  bank  checks,  cenificates  i.f  deposit. 


promissory  notes,  drafts,  bills  of  exchange,  or  other  orders  or  instruments  for  the  payment  of 
money,  now  drawn  or  endorsed,  or  hereafter  drawn  or  endorsed,  payable  to  my  order  and  to  accept 
any  draft  or  drafts,  bill  or  bills  of  exchange  or  other  order  or  orders  for  the  payment  of  money, 
now  drawn  or  hereafter  to  be  drawn  upon  me,  also  for  me  and  in  my  name,  place  and  stead,  from 
time  to  time,  to  borrow  such  sum  or  sums  of  money  as  my  said  attorney  may  think  proper,  and  as 
security  for  the  repayment  of  such  loan  or  loans,  to  make,  sign  and  deliver  any  promissorj-  note  or 
notes,  bill  or  bills  of  exchange  draft  or  drafts,  or  other  order  for  the  payment  of  money,  to  pledge  or 
hypothecate  any  and  all  commercial  paper,  bonds,  stocks,  cerlificales  of  deposits  or  securities  be- 
longing to  me,  to  endorse  any  and  all  such  commercial  paper,  and  £0  make,  execute  and  deliver 
any  and  all  such  instruments  of  assignment  or  transfer,  as  may  be  necessary,  expedient  or  cus- 
tomary in  like  cases  to  effectually  transfer  the  securtties  to  the  person,  firm  or  corporation  making 
such  loan  or  loans,  giving  and  granting  unto  my  said  attorney  full  power  and  authority  to  do  and 
perform  all  and  every  act  aud  thing  whatsoever  requisite  and  necessary  to  be  done  in  ?nd  about 
the  premises  as  fully,  to  all  intents  and  purposes,  as  I  might  or  could  do  if  personally  present, 
with  full  power  of  substitution  and  revocation,  hereby  ratifying  and  confirming  all  that  my  said 
attorney  or  his  substitute  shall  lawfully  do  or  cause  to  be  done  by  virtue  hereof. 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  the  first  day  of  May,  in  the  year  one 
thousand  eight  hundred  and  ninety-nine. 

Sealed  and  Delivered 
in  presence  of 

E-  F-  A,  E.  [Seal,] 

For  form  of  Acknowledgment,  see  "Acknowledgment." 


223.    Power  of  Attorney  to  Sign  Checks. 

(This  form  would  not  bind  the  principal  to  overdrafts,) 

Know  all  men  by  these  presents,  that  I.  A.  B.,  of  ,  in  ihe  county  of  ,  and  Siate 

of         ,  do  make,  consiitute  and  appoint  C.  D.,  of  said  ,  my  true  and  lawful  attorney,  lor 

me  and  in  my  name. 

r.    To  draw  checks  against  my  account  in  the  Bank. 

2.  To  endorse  notes,  checks,  drafts  or  bills  of  exchange,  which  may  require  my  indorsement 
for  deposit  as  cash  or  for  collection  in  the  said  bank. 

3.  To  accept  all  drafts  or  bills  of  exchange  which  may  be  drawn  upon  me,  and  to  do  all 
.awful  acts  requisite  for  effecting  these  premises  ;  hereby  ratifying  and  confirming  all  that  the  said 
attorney  shall  do  therein  bv  virtue  of  these  presents. 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  the  first  day  of  October,  in  the  year 
of  our  Lord  one  thousand  nine  hundred. 
Signed,  Sealed  and  Delivered 
in  presence  of 

A.  B.  [Seal.] 

Power  of  Attorney — Partnership. 

(This  form  would  cover  overdrafts  and  accommodation  indorsements.) 

Know  all  men  by  these  presents,  that  we  ,  have  made,  constituted,  and  appointed 

by  these  presents  our  true  and  lawful  attorney  for  us  and  in  our  name,  place,  and  stead,  in 

transacting  any  business,  directly  or  indirectly,  with  any  bank  or  corporation,  their  officers  or 


agents,  or  with  any  other  person  or  persons,  to  sign,  indorse,  draw,  accept,  make,  execute,  and 
deliver  all  such  notes,  checks,  bills  of  exchange,  overdrafts,  and  other  contracts  or  instruments  in 
writing  with  or  without  seal,  and  also  to  sign  our  firm  name  as  attorney  to  any  transfer  of  any 
stocks,  bonds,  or  other  securities  whatsoever,  or  agreements  or  papers  or  paper  writings  in  any 
way  connected  with  our  said  business,  and  to  make  such  verbal  contracts  as  he  mav  deem  proper, 
and  to  do  any  act  or  acts  or  make  any  contract  or  contracts,  either  verbal  or  in  writing,  or  sign  any 
paper  or  papers  in  any  way  connected  with  our  said  business,  or  in  which  it  shall  be  necessary  to 
sign  the  nameof  our  said  firm  ;  it  being  intended  lo  give  and  hereby  gi  l  ing  and  granting  unto  our 
said  attorney  full  power  and  authority  to  do  and  perform  all  and  ever"  act  and  thing  whatsoever 
requisite  and  necessary  to  be  done  in  and  about  the  premises  as  fully  to  all  intents  and  purposes 
as  we  or  any  member  of  our  said  firm  might  or  could  do  if  personally  present ;  hereby  ratifying 
and  confirming  all  that  our  said  anornev  shall  lawfully  do  or  cause  to  be  done  by  virtue  hereof ; 
and  any  such  notes,  checks,  bills  of  exchange,  contracts,  or  instruments,  stocks,  bonds,  or  securi- 
ties, or  other  paper  of  whatsoever  nature,  signed,  indorsed,  drawn,  accepted,  made,  transferred, 
executed,  or  delivered  by  our  said  attorney,  shall  bind,  and  are  hereby  ratified  and  confirmed  by 
the  undersigned.  Even  if  made  in  whole  or  in  part  for  the  accommodation  or  benefit  of  third 
parties  or  for  the  accommodation  and  benefit  of  our  said  attorney. 

In  witness  whereof,  we  have  hereunto  set  our  hands  and  seals  the  day  of  ,  in  the  year 
one  thousand  eight  hundred  and 

Sealed  and  delivered  in  the  presence  of 

  [SMl.] 

  [Seal] 

  [Seal.] 

For  form  of  acknowledgment,  see  "  Acknowledgment." 


224-   Power  of  Attorney  — Sale  and  Transfer  of  Stock. 

Know  all  men  by  these  presents,  thai  I.  A.  B.,  ,  in  the  county  of  ,  and  State 

of  .  for  value  received,  have  bargained,  sold,  assigned  and  transferred,  and  by  these 

presents  do  bargain,  sell,  assign  and  transfer  unto  C.  D.,  of  said  ,  foriy  shares  of  the  capital 
stock  of  the  company,  standing  in  my  name,  on  the  books  of  the  said  company,  and  do 

hereby  consciluie  and  appoint  said  C.  D.  my  true  and  lawful  attorney  irrevocable  for  and  in 

my  name  and  siead  to  his  use.  to  sell,  assign,  transfer  and  set  over  all  or  any  part  of  the  said  slock, 
and  for  that  purpose  to  make  and  execute  all  necessary  acts  of  assignment  and  transfer,  and  one 
or  more  persons  to  substitute  with  like  full  power,  hereby  ratifying  and  confirming  all  that  my 
said  attorney  or  substitute  or  substitutes  shall  lawfully  do  by  virtue  hereof. 

In  witness  whereof.  I  have  hereunto  set  my  hand  and  seal  the  first  day  of  October,  one 
thousand  nine  hundred. 
Sealed  and  Delivered  in  the  presence  of 


E.  F. 

For  form  of  Acknowledgra 


I,  see  "  Acknowledgment." 

Power  to  Transfer  Stock. 

nts,  that  I,  A.  B.,  of  ,  in  the  State  of 

)  be  my  tr 


A.  B. 


[Seal.] 
,  do  hereby 


225. 

Know  all  men  by  these  pres 
constitute  and  appoint  C.  D  ,  of  said  ,  to  be  my  true  and  lawful  attorney,  tor  me  and  in 

my  name  and  behalf,  to  sell,  assign  and  transfer  to  E.  F..  of  said  ,  the  whole  or  any  part 

of  my  stock  in  the  Y,  M.  O.  Railrond  Company,  and  for  that  purpose  to  make  and  execute  ail 

In  witness  whereof,  I  have  hereunto  set  my  hand  and  seal  this  ist  day  of  October,  1900. 
Sealed  and  Delivered  in  the  presence  of 
G.  H. 

For  form  of  Acknowledgment,  see  "Acknowledgment."  A.  B.  [Seal.] 


226.    Power  of  Attorney  Irrevocable. 

Know  all  men  by  these  presents,  that  I,  A.  B..  of  ,  in  the  county  of  ,  and  State 

of  ,  in  consideration  of  one  dollar,  and  oiner  good  and  valuable  consideration,  to  me  paid 

by  C.  D.,  of  said  ,thc  luceipt  whereof  is  hereby  acknowledged,  have  irrevocably  made, 

constituted  and  appointed,  and  by  these  presents  do  irrevocably  make,  constitute  and  appoint 
Slid  C.  D  my  true  and  lawful  attorney,  for  me  and  in  my  name,  place  and  stead  to  sell,  barter, 
exchinge  or  mortgage  in  whole  or  in  part,  a  certain  piece  or  parcel  of  land  situated  in  ,  in 

the  county  of  ,  and  Slate  of  .  and  bounded  and  described  as  follows,  viz.  :  [descrip- 

lion  of  property],  and  to  sell,  barter,  exchange  or  mortgage  any  other  real  or  personal  property 
received  or  taken  in  whole  or  partial  payment  or  exchange  therefor,  wholly  or  in  part,  at  any  lime 
within  three  years  from  Ihe  date  hereof  giving  and  granting  unto  my  said  attorney  full  and  irre- 
vocable power  and  authority  to  do  and  perforrr  .ill  and  every  act  and  thing  whatsoever  requisite 
and  necessary  to  be  done  in  and  about  the  premjses,  as  fully  to  all  intents  and  purposes,  as  I 
might  or  could  do  if  personally  present,  with  full  power  of  substitution  and  revocation,  hereby 
ratifying  and  confirming  all  that  my  said  attorney  or  his  substitute  shall  lawfully  do  or  cause  to  be 
done  by  virtue  hereof. 


Sealed  and  D< 
in  the  presen 


e  of 
E.  F. 


For  form  of  Acknowledgment,  t 


*  Acknowledgment." 


A.  B.  [Seal.] 


'  The  right  to  give  and  to  use  proxies  at  meetings  of  corporations  is  generally  regulated  by 
statute  in  (he  different  States  and  in  some  cases  the  form  of  proxy  to  be  used  is  given  in  (he 
statute. 

229.   General  Form  of  Proxy. 

Know  all  men  by  (hese  present,  (hat  do  hereby  constitue  and  appoint  .attorney 

and  agent  for  ,  and  in  name,  place  and  stead,  (o  vote  as  proxy  at  any  election  of 

or  of  [he  stockholders  of  [insert  name  of  the  corporation],  according  to  the  number  of 
votes  should  be  entided  to  vote,  if  then  personally  present,  hereby  revoking  all  previous 


In  witness  where       have  hereunto  set      hand  and  seal,  at 
Signed,  Sealed  and  Delivered 
in  the  presence  of 


day  of 


[Signn 


.  [Seal.] 


230.   Form  Given  in  New  York  Business  Corporations  Law. 

'■  ■  °^         ■      ^""^y  appoint         ,  of         to  vole  as  my  proxy  at  the  annual  meet, 

ing  of  stockholders  of  [insert  name  of  corporation],to  be  held  on  the  day  of  ,  150  .  and 
at  any  adjourned  meeting  thereof. 

In  witness  whereof,  I  have  hereunto  sel  my  hand  and  seal,  this         day  of        ,  190  . 
In  presence  of 


.[Seal.] 


The  New  York  law  provides  that  no  proxy  shall  be  valid  for  more  than  eleven  months  from  its 
dale,  unless  some  other  time  shall  be  specifically  limited  in  it. 


This  form  of  execution  and  witnessing  of 
a  will  is  good  in  any  state.  Some  states  do 
not  require  a  witness,  —  none  require  more 
than  three. 


233.  Will, 

I,  A.  B.,  of         ,  in  the  county  of  ,  and  State  of         ,  being  of  sound  and  disposing  mind  and  memory,  do  make, 

publish  and  declare  this  to  be  my  last  will  and  testament,  hereby  revoking  any  and  all  former  wills  by  me  at  any  time  hereto- 
fore made. 

I  bequeath  to 
I  bequeath  to 
I  bequeath  to 
I  bequeath  to 

All  the  rest,  residue  and  remainder  of  my  estate,  real,  personal  and  mixed,  I  give,  devise  and  bequeath  to 
I  make,  constitute  and  aDpoint  ,  to  be  executors  of  this  my  last  will  and  testament. 

In  witness  whereof,  I  have  hereunto  subscribed  my  name  and  affixed  my  seal  the  first  day  of  October,  m  the  year  of  our 
Lord  one  tliousand  nine  hundred  A.  B.  [Seal.] 

The  above  written  instrument,  consisting  of  two  pages,  was  subscribed  by  the  said  A.  B.  in  our  presence,  and  acknowledged 
by  him  to  each  of  us  ;  and  he  at  the  same  time  declared  the  above  instrument  so  subscribed  to  be  his  last  will  and  testament ; 
and  we  at  his  request,  in  his  presence,  and  in  the  presence  of  each  other,  have  signed  our  names  as  witnesses  hereto,  and  written 
opposite  our  names  our  respective  places  of  residence,  on  the  day  and  year  last  above  written. 
■O-  P.  residing  at 

Q-  residing  at 

S-  T.  residing  at 


TIMB  OF  BUPLOTMBITT.-'-A  hiriog  at  so  much  a  day.  week,  month  or  year,  no  time  being  specified,  is  an 
indeC-ale  binng,  aod  no  presumption  attaches  that  il  was  for  a  day  even,  but  only  at  the  rale  fixed  for  whatever  time 
the  party  may  serve  ...  A  contract  to  pay  one  Kjoo  a  year  for  services  is  not  a  contract  for  one  year,  but  a 
contract  to  pay  at  the  rate  of  $3,500  a  year  for  services  actuaUy  rendered,  and  is  determinable  at  will  by  either  party  " 
148  N.  Y.  .17;  ,  Cal.  450;  35  Ark.  156;  j8  Wis.  131. 

COWTRACTS  FOR  MOHB  THAU  OI?B  TEAK._A  contract  for  services  for  more  than  one  year  cornea  within 
the  statue  of  frauds  and  must,  to  be  valid,  be  in  writing,  and  Blgned  by  the  parties;  other  contracts  for  services 
including  contracts  from  year  to  year,  may  be  verbal.  ' 

220.   Employment  Contract— Definite  Time. 

Memorandum  of  ageement,  made  this  day  of  ,  i  90  ,  by  and  between  A.  B.,  of 
,  in  the  county  of  ,  and  State  of         ,  party  of  the  Erst  part,  and  C.  D    of  '  in 

the  county  of  ,  and  state  of         ,  party  of  the  second  part:    Wiinesseih.  In  consideration 

of  ihe  mutal  agreements,  hereinafter  set  forth,  and  for  other  good  and  valuable  considerations,  the 
said  parties  agree  to  and  with  each  other  as  follows,  viz.: 

The  party  of  ihe  first  part  agrees  to  hire  and  employ,  and  hereby  does  hire  and  employ  the 
party  of  the  second  part  as  a  clerk  and  accoutant.to  perform  such  clerical  and  office  duties  as  the 
party  of  the  first  part  may  from  lime  to  lime  prescribe  and  direct,  for  the  specified  and  definite 
lime  of  one  year  from  the  date  thereof,  ai  the  yearly  salary  of  eighteen  hundred  dollars  payable  in 
equal  monthly  payments  of  one  hundred  and  fifty  dollars  each,  on  the  last  day  of  each  calendar 
mpnih  of  said  employment. 

The  party  of  the  second  part  agrees  to  accept  and  undertake,  and  hereby  does  accept  and 
undertake,  the  said  hiring  and  employment,  at  the  yearly  salary,  and  upon  the  time,  terms  and  con- 
ditions above  specified,  and  agrees  10  give  his  best  efforts  and  energy  to  the  performance  of  such 


clerical  and  office  duties  as  the  party  of  ihe  first  pan  may  from  time  to  time  nre';rrih<'  anH  ^i^^^, 

6rsl  Ibo^e  wn"e".''"'°''  '"'^  "''^  '"'i  7'" 

In  presence  of 

^'  A.  B.       rSeal  1 

C.  D.  fSeal.] 

201.   Employment  Contract— Terminable  at  Any  Time. 

Mr.  A.  B..  New  Haven   Conn  Danbury,  Conn.,  October  I,  1902. 

Dear  Sir,— I  need  a  superinlendent  for  my  mill  in  this  place,  and  you  have  been  recomin,nrf„l 
to  me  or  the  posi.ion.  I(  you  will  take  it.  I  will  give  yoj^ twelve  hundred  dollars  a  ,"7  payable 
monthly,  and  you  can  commence  on  the  fifth  of  this  month.  ^  pa)abJe 

Yours  truly. 

C,  D, 

Mr.  C,  D.  Danbury,  Conn,  -  "  '9°^- 

Dear  Sir,— I  have  just  received  your  letter  of  yesterday,  and  write  to  say,  I  hereby  accent  vour 
offer  of  employment  as  superintendent  of  your  mill  in  Danbury.  on  the  term  you  menS  \nj 
shall  be  ready  to  enter  upon  my  duties  on  the  fifth  of  this  month,  as  suggested  by  you 

Yours  truly. 

  A,  B, 


QUESTIONS. 


Wlat  lie  the  principal  roims  ot  commeiclal  paper  In  tally  me?   (See  HL  page  5.) 

Is  a  bond  and  mortgage  a  negotiable  instrument?   A  lease?   A  building  contract?  i. 

What  is  tie  material  difierence  between  a  negotiable  and  a  non-negotiable  instru- 
ment? 2.  Page  5. 

When  did  negotiable  instmments,  as  such,  come  into  use?   3.   Page  6. 

If  money  was  stolen  from  the  true  owner,  could  he  recover  it  from  one  who  came 
by  it  innocently  if  he  could  positively  identify  it?  How  would  this  be  as  to  a  horse; 
a  watch;  a  quantity  of  grain;  a  negotiable  instrument?  5.    Page  7. 

Who  can  take  advantage  of  the  special  privileges  surrounding  commercial  paper?  8 
9,  10.   Page  8. 

Would  a  person  be  a  holder  in  due  course,  or  a  bona-flde  holder,  if  he  took  the  instru- 
ment after  it  was  due?  Or  if  it  had  some  irregularity  on  its  face?  Or  if  he  had  notice 
nf  any  defects  or  infirmities  in  it,  or  in  the  title  of  the  seller?  Or  if  he  did  not  take  it 
^r  a  valuable  consideration?  8,  9,  10.  Page  8. 

Are  bonds  ever  classed  as  negotiable  instruments?  If  so,  what  bonds?   11.   Page  9. 

Are  bonds  called  commercia'  paper?   11.  Page  9. 


Must  commercial  paper  be  in  "wriling"?   19a.   Page  >i. 
Is  commercial  paper  vaUd  if  written  with  a  pencil?   iga.     Page  11. 
Would  type  impressions  be  caUed  writing  in  any  part  of  a  ncgoUable  inatnunent? 
19a.    Page  II. 

Is  there  any  part  of  a  commercial  paper  that  requires  a  particular  kind  of  writine? 
19a.     Page  II.  ' 

Is  it  necessary  to  the  vaUdity  of  negotiable  instruments  that  the  place  of  issuance 
be  stated?   19b.    Page  11. 

Must  a  negotiable  instrument  have  a  date  expressed  on  its  face  in  order  to  make  it 
valid?   19b.    Page  11, 

Is  an  instrument  dated  on  Sunday  ever  valid?   19b.     Page  11. 

Can  the  instrument  be  properly  dated  back  or  dated  ahead?   19b.    Page  11. 

Is  an  instrument  dated  and  delivered  on  July  4th  or  December  asth,  or  any  secular 
holiday  valid?   igb.   Page  11. 

Is  an  instrument  good  in  the  hands  of  one  who  knew  it  was  dated  and  signed  on 
Friday  but  delivered  and  first  sold  on  Sur^ay?   igb.     Page  11. 


QUESTIONS- 


If  an  instrument  had  no  date  written  on  it,  from  when  would  the  law  fix  its  date? 
19b.    Page  II. 

If  the  instrument  was  dated  and  signed  on  Sunday,  but  not  deUvered  or  sold  until 
Tuesday,  would  it  be  valid?   19b.  Page  11. 

How  is  the  time  of  payment  of  commercial  paper  usually  expressed?   19c.  Page  12. 

If  no  time  of  payment  is  written  in  the  instrument,  when  is  it  payable?  19c 
Page  12.  .  .  -i 

If  the  blani.  line  for  writing  time  of  payment  is  not  filled,  when  is  the  paper  due? 
igc     Page  12. 

Can  a  negotiable  instrument  be  payable  in  fixed  installments?   19c.    Page  12. 
If  the  paper  is  payable  on  demand,  when  can  demand  be  made?   19c.     Page  12. 
When  must  the  demand  of  payment  be  made  on  paper  payable  on  demand?  19c. 
Page  12. 

Is  there  any  different  rule,  than  that  last  mentioned,  in  regard  to  checks?  19c  If 
80,  state  it.    19c.     Page  12. 

What  is  a  "  reasonable  time  "  in  which  to  make  demand  on  an  Instrument  payable 
on  demand?  19c.     Page  12. 

How  long  would  a  prudent  man  hold  such  an  instrument  without  a  demand  if  he 
expected  to  retain  the  liability  of  an  indorser  thereon?   19c.    Page  12. 


When  is  an  instrument  payable  "  at  sight  usuaUy  payable?  19c.  Page  12.  Are 
there  exceptions?   Page  iz. 

('•  Days  of  grace  "  are  three  days'  additional  time  allawed  the  payor  in  which  to  make 
payment.  See  page  40.) 

When  an  instrument  is  payable  a  given  time  "  after  sight,"  when  does  "  sight "  date 
from?    19c.    Page  12. 

Is  an  instrument  payable  at  the  death  of  the  maker  negotiable?  19c  Page  12.  Why? 
19c.  Page  12. 

Would  the  instrument  be  negotiable  if  payable  one  year  after  the  mamage  of  the 
maker?   19c.  Page  12.  Why?   19c.  Page  12. 

It  is  said  that  the  time  of  payment  of  commercial  paper  must  not  depend  on  a 
contingency:  In  the  event  of  the  contingency  happening,  would  the  paper  then  be  nego- 
tiable?  19c.   Page  T2. 

Name  some  contingencies  as  to  time  of  payment  that  would  make  the  paper  non- 
negotiable,  and  why.    19c.    Page  la. 

It  is  said  that  the  promise  or  order  to  pay  must  be  unconditional,  and  not  dependent 
on  the  performance  of  any  further  act  or  duty.  Name  nnv  such  condition  that  would 
violate  this  rule.   igd.  Page  14. 


QDESTIOHS. 


The  oriet  or  promise  to  pay  must  not  be  out  of  some  apectal  account  or  fund, 
flame  some  dircctiona  or  promises  to  pay  that  would  disregard  this  rule.  igd. 
rage  14.  ' 

The  instrument  most  name  a  payee.  If  it  is  payable  "  to  order,"  must  the  payee  be 
named  with  any  more  certainty  than  if  payable  to  "  bearer  »?   ige.    Page  15. 

Xf  the  payee  is  properly  named,  is  it  necessary  that  the  words  "to  order"  or  "or 
bearer,"  or  their  equivalent,  be  used?   19c.     Page  15. 

What  is  the  effect  if  the  maker  draw  the  instrument  to  the  order  of  a  fictitious  person  ? 
18  the  instrument  negoUable?   Who  is  it  payable  to?   loe.      Page  15. 

Does  paper  as  above  drawn  have  the  sanction  of  law?  Who  cannot  enforce  it?  loe 
Page  12.  ^ 

What  is  the  sUtus  of  paper  payable  to  an  impersonal  payee,— as  "Cash  or  order"? 
ise.  Page  15. 

Is  it  proper  to  make  commercial  paper  payable  to  the  order  of  one  who  is  doing 
Page  15  ™^''  business  name,-aa  "  The  Empire  Grocery  Company"?  ige. 

Can  the  same  person  be  maker,  acceptor,  drawee,  and  payee  of  a  negotiable  Instru- 
ment?  ige.    Page  15. 

Can  'here  be  more  than  one  payee?  ige.   Page  15. 


If  the  amount  stated  in  figures  and  that  in  writing  are  at  vanance,  which  will 
govern?   igf.  Page  16. 

What  medium  must  commercial  paper  be  payable  in?  19L 

Mame  some  expressions  as  to  medium  of  paymtnt  that  are  good,-and  some  that  are 
bad.   igf.  Page  16. 

Can  the  promise  to  pay  be  in  goods  and  chattels?   igf.  Page  16. 

Is  a  note  which  provides  for  the  payment  of  attorney's  fees  non-negotiable  in  some 
States?   igf.    Page  16. 

In  some  States  r-ust  the  instrument  be  payable  at  a  bank?  If  so,  what  States?  lun 
Page  17. 

Are  the  words  "  value  received,"  or  similar  expressions,  necessary  ?  loi 
Page  17. 

What  is  the  eSect  of  a  material  alteration  of  the  instrument?  ig  h-L   Page  18. 
What  parts  may  not  be  altered?  ig  h-i.    Page  18. 

Would  the  alteration  be  fatal  if  the  amount  was  increased?   ig  h-i.  Page  18. 
Would  the  alteration  be  fatal  if  the  amount  or  UabiUty  of  the  parties  was  decreased? 
19  h-i.    Page  18. 

H  the  alteration  was  innocently  made,  would  it  have  any  effect  on  the  instrument? 
il  so,  what  eSect?    19  h-l.    Page  18. 


QUESTIONS. 


If  the  Inatrnment  was  matil«tecl  by  a  stranger,  wliat  effect  would  it  have?  xg  b-i. 
Page  18. 

Must  "  notice  "  of  infirmity  or  defect  of  title  in  the  instrument  be  written  notice? 
ig  h-i.   Page  18. 

Mention  some  infirmities  as  shown  in  Nos.  16,  17,  18,  30,  31,  32,  86,  87* 
Who  is  the  drawer  or  maker  of  commercial  paper?  20,  Page  so. 
Who  is  the  drawee?   ai.    Page  ao. 
Who  is  the  payee?   22.    Page  20. 

If  the  drawee  accepts  the  hill,  what  is  he  then  called?  23.   Page  aa 

Who  is  an  indorser?   34.    Page  20. 

Who  are  the  original  parties  to  a  check?  25.    Page  20. 

Who  are  the  original  parties  to  a  promissory  note?   26.    Page  20. 

Who  are  the  original  parties  to  a  bill  of  exchange  or  to  a  draft?  27.  Page  20, 

Does  the  drawer  of  a  check,  by  the  mere  act  of  drawing  it,  make  any  special  repre- 
sentations? If  so,  what?  30.  Page  21. 

If  such  representations  are  false,  what  consequences  may  follow  ?  31. 
Page  21. 

What  engagement  Hoes  the  maker  or  drawer  of  a  promissory  note  undertake?  32. 
Page  21. 


it  he  rails  in  his  engagement,  does  be,  or  has  he,  thereby  committed  a  fraud?  3a. 
Page  21. 

What  are  the  consequences  if  the  maker  of  a  note  fails  to  pay  ?  33. 
Page  ar. 

What  does  the  drawer  or  maker  of  a  bill  of  exchange  or  of  a  draft  represent  to  the 
holder?  33,    Page  21. 

What  legal  wrong  has  be  committed  if  such  representations  are  not  fulfilled?  34. 
Page  21. 

Who  is  the  drawee  of  a  check?  35.    Page  22. 

In  merely  opening  an  account  with  a  depositor  has  the  bank,  without  doing  or  say- 
ing anything  further,  entered  into  any  special  contract  with  him?  What,  if  any?  36. 
Page  22. 

Can  a  bank  make  partial  payment  of  a  check?  36.   Page  22. 

Must  a  bank  partially  pay  a  check  and  indorse  the  partial  payment  on  it  if  the 
depositor's  account  is  not  good  for  the  whole  amount?  36.    Page  22. 

If  a  depositor  makes  a  promissory  note  or  accepts  a  bill  payable  at  the  bank,  must 
the  bank  treat  such  note  or  bill,  at  its  maturity,  as  it  would  the  depositor's  check?  37 
Page  22. 

If  a  bank  holds  money  of  a  depositor,  but  has  made  no  special  agreement  to  pay  bis 


QUESTIONS. 


checks  drawn  in  favoi  tf  other  persons,  has  it  obligated  itself  to  him  to  pay  them?  38. 
Page  22. 

If  the  drawee  of  a  bill  of  exchange  is  indebted  to  the  drawer,  is  he  under  legal 
obligation  to  accept  and  pay  the  drawer's  drafts  payable  to  third  parties?  39. 
Page  22. 

If  "  A  "  is  indebted  to  "  B,"  and  the  debt  is  due  and  no  special  place  of  payment  has 
been  provided,  must  "B"  present  his  claim  to  "A,"  or  must  "A"  hunt  up  "B"  and 
tender  payment?    40.    Page  22. 

Before  a  drawee  has  accepted  a  bill  what  implied  obligation  is  he  under  to  the  holder? 
41.   Page  22. 

When  a  bill  has  been  accepted,  who,  if  any  party  to  it,  has  promised  to  the  others 
that  he  alone  will  pay  it?  43,  44,  45.    Page  23. 

If  a  drawee  accepts  the  bill,  what  is  a  usual  and  proper  way  of  doing  it?  46. 
Page  23. 

If  no  special  place  of  payment  is  named  in  a  bill  of  exchange,  may  the  drawee  accept 
it  payable  at  his  bank  in  a  near-by  city  or  village,  but  different  from  the  one  to  which 
the  bill  was  addressed  to  him?   47.     Page  23. 

Must  the  acceptance  be  on  the  face  of  the  paper?  48.    Page  23. 

Must  the  word  "  accepted  "  be  used?  48.  Page  23. 


Is  there  any  part  of  an  acceptance  that  the  holder  may  insis-  on  beine  aone  in  a 
specific  way?  If  so,  what?   How?  49.   Page  23. 

If  the  drawee  is  willing  to  accept  on  certain  conditions  or  with  wrtain  quauncauons, 
and  will  state  them  in  the  acceptance,  should  or  must  the  holder  allow  him  so  to  accept? 
50.   Page  24. 

What  change,  if  any,  takes  place  in  the  liabilities  of  the  parties  to  a  bill  if  the  holder 
chooses  to  allow  a  conditional  or  qualified  acceptance?  50.  Page  24. 

Can  you  name  any  qualification  in  accepting  that  might  change  the  liability  of  the 
parties?  5^.  Page  24. 

Must  a  bank  certify  or  accept  in  writing  a  depositor's  check  if  it  is  good?  52. 
Page  24. 

How  m::y  a  bank  properly  accept  or  certify  a  check?  52.   Page  94. 
What  new  obligation,  if  any,  has  a  bank  assumed  in  certifying  a  check?  53. 
Page  24. 

Who  is  the  payee  of  commercial  paper?   54.    Page  24. 

What  principal  obligation,  if  any,  does  a  payee  assume  in  being  named  as  payee?  54. 
Page  24. 

Give  short  definition  of  the  term  "  indorser."    59.    Page  25. 

Give  a  short  statement  of  the  obligations  assumed  by  an  indoraer?  56.   Page  24. 


QUESTIONS. 


Does  the  term  "Indorser'*  apply  to  one  who  writes  bia  name  on  the  back  of  a  non- 
negotiable  instrument?   55.   Page  24. 

What,  if  any,  difference  is  there  in  the  liability  of  one  who  writes  bia  name  on  the 
back  of  a  non-negotiable  inatrument  and  one  who  so  writes  his  name  on  commercial 
paper?  57-     Page  ^S- 

What  bas  the  indorser  promised  by  his  indorsement?  61.    Page  35. 

Is  tbe  indorser's  promise  conditional,  and,  if  so,  in  what  way?  61.    Page  35. 

Has  the  holder  of  tbe  paper  any  duties  to  perform  or  have  performed,  at  any  time, 
in  order  to  keep  alive  the  liability  of  the  indorser?  61.    Page  25, 

How  many  indorsers  can  there  be?   62.    Page  25. 

Does  it  make  any  difference  to  an  indorser  where  bis  name  appears  with  others  on 
tbe  back  of  tbe  paper?  If  so,  what  difference?  64, 65.  Page  26. 

Does  tbe  owner  of  the  paper  have  to  proceed  against  the  indorsers  in  any  special 
order?   66.     Page  26. 

What  part  of  the  debt  can  the  bolder  collect  from  each  indorser?  66.  Page  26. 

Where  must  tbe  indorsement  be  written?  67.  Page  26. 

Is  an  assignment  on  a  separate  paper  equivalent  to  an  indorsement?  If  not,  why  not? 
68,  Page  aj. 


What  action  or  Inaction,  If  any,  on  tbe  part  of  the  holder  may  release  the  indorser? 
70.   Page  26. 

If  tbe  name  of  tbe  payee  or  indorsee  is  misspelled,  who  may  correct  it,  and  how?  71, 
Page  27. 

To  whom  do  the  terms  "principal  obligor"  or  "party  primarily  liable"  apply?  72. 
Page  27. 

Who  is  the  principal  obligor  to  a  promissory  note?   73.    Page  37. 
Who  is  tbe  principal  obligor  to  an  unaccepted  bill  of  exchange?  Or  draft?  Or  check. 
74.   Page  27. 

Who  is  tbe  principal  obligor  to  an  accepted  hill?  Or  draft?  Or  check?  75. 
Page  27. 

What  is  the  order  of  liability  among  themselves  to  tbe  parties  to  a  promissory  note? 
76-80.  Page  27. 

Can  the  maker  collect  the  note  from  any  indorser?   If  so,  which?   83.   Page  28, 
Can  the  first  indorser,  if  he  bas  paid  tbe  note,  collect  it,  or  any  proportion  of  it,  from 

any  indorser?  If  so,  which,  and  what  proportion?   Can  he  collect  of  the  maker?  81-84. 

Pages  27,  28. 

Can  the  third  indorser,  if  be  bas  paid  the  note,  collect  any  part  of  it  from  the  first 
or  second  indorser?   If  so,  what  part,  and  from  whom?   81-84.   Pages  27.  28. 


QUESTIONS. 


If  several  partiea  have  signed  the  note  on  Its  face,  as  makers,  wbat  is  theii  liability 
among  themselves?   85.   Page  28. 

Must  the  holder  of  the  note  respect  the  foregoii^  liability  of  makers  and  indorsers 
among  themselves?   87.    Page  28. 

What  is  the  order  of  liability  among  themselves  of  the  parties  to  an  unaccepted  bill 
of  exchange?   8g.   Page  28. 

What  is  the  order  of  liability  among  themselves  to  an  accepted  bill  of  exchange? 
go.   Page  28. 

What  order  of  liability  exists  on  a  check  not  yet  accepted  or  paid?  91.    Page  29. 

If  a  bank,  for  ail  idle  or  insufficient  reason,  refuses  to  pay  a  check,  can  the  holder 
and  owner  force  payment  from  the  bank?   gi.   Page  29. 

When  a  bank  certifiep  a  check  for  the  holder,  what  is  the  order  of  liability  of  the 
parties?   93.     Page  29. 

Is  there  a  different  rme  from  tba  fMeg<Hng  if  the  drawer  has  the  check  certified? 
What  difference?  94.     Page  29. 

(Read  95,  96,  97,  98,  as  to  the  general  status  and  obligation  of  a  strict  "  surety") 

In  what  particular  does  the  warranty  of  an  indorser  differ  from  that  of  a  surety? 
99.   Page  30. 

(Read  100  to  106,  as  to  the  general  status  of  a  guarantor.) 


Does  the  word  "guarantor"  carry  with  it  any  fixed,  precise  meaning  as  to  what 
the  guarantor  has  promised  to  do?   102.   Page  31. 

How  is  a  guarantor's  promise  interpreted, — and  where  is  it  found  ?  101-104. 
Page  31. 

(This  rule  as  to  interpreting  the  liability  of  a  guarantor  applies  to  all  kinds  of  con- 
tracts.) 

If  the  holder  of  a  promissory  note  wishes  to  retain  the  liability  of  all  the  partiea 
thereto,  what,  if  any,  duty  is  imposed  on  him?   107,  108,  109.   Page  31. 

What  duty  is  imposed  on  the  holder  of  a  check  if  he  deserves  to  retain  the  liability 
of  an  indorser?   no.   Page  32, 

Under  what  circumstances  is  the  maker  of  a  check  released  from  liability?  111,  112. 
Page  33. 

Is  the  bank  released  from  liability  by  any  delay  in  presentation  of  a  check?  113. 
Page  32. 

Can  the  holder  of  a  check  compel  the  bank  to  pay  him?   114.   Page  32, 
If  the  bank  refuses  payment,  to  whom  must  the  holder  look  for  redress?  115, 
Page  33. 

What  duty,  if  any,  does  the  holder  of  a  bill  of  exchange  owe  to  the  parties  In  ordtft 
to  retain  their  liability?   116,  117.    Page  33. 


QUESTIONS. 


If  a  bill  has  been  protested  for  non-acceptance,  need  it  te  protested  for  non-payment? 
rig.   Page  32. 

Who  may  bind  himself  as  a  party  to  commercial  paper?   lao.   Page  32. 

Can  business  corporations  issue  commercial  paper?  And  if  so,  how?   121.  Page  32, 

Can  business  corporations,  through  proper  officers,  make  and  indorse  paper  as  an 
accommodation  to  others?   121.   Page  32. 

If  a  minor  has  had  the  full  benefit  of  commercial  paper  whict  he  has  indorsed  or 
issued,  can  it  be  enforced  against  him?   122,   Page  33, 

Can  women,  generaUy,  bind  themselves  as  makers  or  indorsers  of  commercial  paper? 
123.   Page  33. 

Can  one  partner  bind  the  other  partners  by  making  or  indorsing  commercial  paper 
in  the  firm  name?   124.  Page  33. 

Does  the  rule  as  to  commercial  paper  signed  or  indorsed  in  a  partnership  name  hold 
the  same  in  all  partnerships?  If  not,  explain.   127.  Page  33. 

From  what  time  does  commercial  paper  bind  the  maker  or  drawer?    128.    Page  33. 

Are  there  some  conditions  under  which  commercial  paper  cannot  he  enforced  against 
the  drawer  or  maker?   If  so,  name  any  such  condition.    128,  129.    Page  33. 

When  is  commercial  paper  "  delivered  "?   128,  129.    Page  33. 

If  aU  of  the  original  parties  to  an  instrument  have  signed  and  rr""'-'"  executed  It, 


is  it  then,  and  with  nothing  more,  an  enforceable  contract?   128,  129,  130.  Pages  33,  34. 

If  after  the  paper  is  properly  put  in  circulation  it  is  stolen  from  the  owner  and  sold 
to  a  bona-fide  purchaser,  can  the  latter  collect  the  amount  from  the  maker  and  retain  the 
money?   130.    Page  34. 

How  is  commercial  paper  negotiated?   131,  132.  Page  34. 

Is  it  necessary  for  the  owner  to  indorse  the  instrument  in  negotiating  it?  132,  r33. 
Page  34. 

Must  there  be  a  consideration  for  the  making,  indorsing,  or  accepting  of  commercial 
paper?    134-136.   Page  34. 

Must  the  consideration  have  been  paid  to,  or  be  for  the  benefit  of,  the  one  placing  his 
name  on  it?   134-136.    Page  34. 

Of  what  may  the  consideration  consist?   r34-i36.   Page  34. 

If  part  of  the  consideration  for  commercial  paper  was  lawful  and  part  illegal,  what 
part  of  the  instrument  can  be  enforced?   138.    Page  35. 

iState  some  considerations  that  are  illegal.   139,  Page  35. 

If  a  father  makes  a  gift  of  his  own  note  to  his  son,  can  the  son  enforce  the  note?  144. 
Page  35. 

If  one  makes  a  gift  to  his  brother  of  oommercial  paper  made  by  a  third  party,  can 
the  recipient  of  the  gift  enforce  the  note  for  his  own  benefit?    145.    Page  36. 


QUESTIONS. 


When,  if  ever,  is  the  check  drawn  by  the  donor  effective  as  a  gift?   146.   Page  36, 

What  formalities  ate  absolutely  essential  to  perfect  a  gift  in  case  of  the  death  of 
the  donor?   147.   Page  36. 

If  it  can  be  proved  that  a  father  gave  his  daughter  a  government  bond,  the  father  in 
the  gift  retaining  the  property  in  his  possession  and  control  until  his  death,  will  such 
gift  be  effectual  after  the  death  of  the  father?   148.  Page  36. 

When  does  an  instrument  have  "inception"?   149.    Page  36. 

For  how  long  a  time  may  the  holder  make  extension  of  time  of  payment  to  the 
maker  without  releasing  the  indorsers?   150-156.    Pages  36,  37. 

If  one  indorser  is  released,  does  it  release  any  other  parties  to  the  instrument?  Who, 
if  any?   150-156.   Pages  36,  37. 

If  the  maker  of  a  note  has  given  the  holder  collateral  security  for  the  debt,  and  they 
agree  together  to  release  the  collateral,  does  such  action  release  any  of  the  parties?  Who, 
il  any?    150-156.    Pages  36, 37. 

If  the  holder  of  the  instrument  neglects  to  proceed  in  law  against  the  maker  for  a  long 
time,  does  such  inaction  release  the  indorsers?  If  so,  or  if  not,  is  the  rule  universal? 
155-156.   Page  37. 

If  the  bolder  of  a  past-due  indorsed  instrument  accept  interest  that  is  due,  has  be 
prejudiced  his  security  in  any  way?   157.   Page  37. 


If  an  indorser  of  commercial  paper  feels  that  it  is  for  his  interest  to  have  the  maker 
or  other  indorsers  proceeded  against,  what  remedy  has  he?    159-156.    Page  37. 

If  an  indorser,  as  last  mentioned,  takes  up  the  paper,  are  any  of  the  parties  thereby 
released?    iSo.   Page  37. 

Who  usually  "  protests  "  commercial  paper?   162,  Page  37. 

Why  is  paper  protested?   16a.   Page  37. 

When  is  paper  protested?   163-165.    Page  38. 

What  are  some  of  the  requisites  of  a  protest  of  commercial  paper?   163.  Page  38. 

M  there,  is  no  place  of  payment  mentioned  in  the  instrument,  where  is  It  to  be  pre- 
sented for  payment  or  protest?   164-163.  Page  38. 

If  several  persons  sign  a  note  as  makers,  how  much  of  the  amount  of  the  note  can 
the  holder  make  one  of  them  pay?   166.     Page  38. 

If  one  of  several  signers,  as  before  mentioned,  pays,  what  contribution  can  be  have 
from  the  others?   166.    Page  38. 

If  an  instrument  is  silent  as  to  time  of  payment,  when  is  it  payable?  167. 
Page  38. 

At  what  time  is  an  instrument  due  and  payable  on  demand  due  and  payable?  168. 
Page  38. 

If  an  instrument  is  payable  at  sight,  when  is  it  dne  and  payable?   169.  Page  39. 


QCESTIOHS. 


Are  there  any  exceptions  to  thia  rale?  169.   Page  39. 

If  an  instrament  is  payable  a  certain  number  of  months  after  date,  what  months 
are  meant?   r7o.   Page  39. 

If  a  note  is  Sated  Pebraary  20th,  and  is  payable  in  three  months,  when  is  it  due?  jji. 
Page  39. 

If  a  note  is  dated  January  31st,  payable  in  one  month,  when  is  it  due?  173 
I'age  39. 

When  the  time  of  payment  is  espresaed  in  days,  are  Sundays  and  holidays  induded? 
r72.   Page  39. 

In  computing  the  maturity  of  an  instrmnent,  is  the  day  of  the  date  included?  15a. 
Page  39. 

When  is  a  note  dated  Hay  30th,  payable  in  ninety  days,  due?   rys.   Page  39. 

Does  the  law  allow  fractions  of  days  in  computing  time?   ij;.  Page  39. 

If  two  dates  are  given,  one  the  day  of  the  week  and  one  the  day  of  the  month,  and 
they  are  inconsistent,  which  one  governs?   r77.  Page  40. 

If  an  instrament  matures  on  a  Sunday  or  hoUday,  when  does  it  become  payable? 
r78.   Page  40. 

Can  a  check  or  note  that  Is  due  and  payable  on  Saturday  in  States  where  Saturday 
18  a  half  holiday  he  presented  on  that  day?   rjg.   Page  40. 


Is  the  foregoing  rale  tree  as  to  other  contracts?   r8o.  Page  40. 
What  are  days  of  grace?    ra2.   Page  40. 

If  an  instrument  stated  on  its  face  that  it  was  due  July  20th,— thus,  "July  10,  1902, 
pay  to  the  order  of,"  etc,— and  it  was  made  in  a  State  where  days  of  grace  are  allowed, 
when  would  it  be  due  and  payable?   185.  Page  40. 

What  is  accommodation  paper?   186.   Page  40. 

Is  accommodation  paper  valid?   187.  Page  40. 

Can  corporations  make  accommodation  paper  or  become  indoraera  on  such  paper?  188 
Page  4r. 

Can  a  partner  hind  his  firm  as  a  maker  or  indorser  on  accommodation  paper?  rSo 
Page  41.  ^' 

How  does  a  check  differ  from  a  hill  of  exchange  or  a  draft?  rgo.  Page  42. 

What  term  appUes  to  an  instrament  that  is  drawn  by  one  bank  on  another?  rg. 
Page  42.  '  ' 

Page's"  ""^  °'  °'  *  "^'^  °°      P"!™™"  '94- 

If  a  bank,  for  reasons  of  its  own,  chooses  to  refuse  payment  of  a  check,  has  the  holder 
of  the  check  a  right  of  action  against  the  bank?  195.   Page  42. 


S7e 


QUESTIONS. 


Is  the  law  on  thie  subject  common  to  all  the  States?  ig6, 197.  Page  43. 

Uuat  banks  pay  checks  in  the  oider  of  their  presentation?   ig8.    Page  43. 

When  must  the  holder  of  a  check  present  it  for  payment?  soo.   Page  43. 

Is  there  a  different  rule  where  the  bank  is  in  a  place  other  than  that  at  which  the 
holder  receives  the  check?  201.   Page  43. 

If  a  check  is  sent  to  another  bank  for  collection,  when  should  It  present  It  for  pay- 
ment? 203.    Page  43. 

If  a  depositor  has  insufficient  funds  to  pay  the  full  amount  of  the  check  He  has 
drawn,  must  the  bank  apply  whatever  balance  he  has  to  the  payment  of  the  check?  305. 
Page  43. 

If  the  drawer  of  a  check  has  stopped  payment  on  it,  what  Is  the  duty  of  the  bank? 
ao6.   Page  43. 

If  a  bank  accepts  or  certifies  a  check,  what  effect  does  that  have  on  the  liability  of  the 
drawer  or  indorser?   207.   Page  43. 

Is  the  rule  changed  if  the  drawer  procures  the  bank  to  accept  the  check?  ao8. 
Page  44. 

Will  a  verbal  acceptance  or  certification  of  a  check  ever  bind  a  bank?  aog.  Page  44. 
Where  a  bank  pays  a  check  to  an  innocent  holder  of  it,  and  it  subsequently  develops 
that  the  drawer's  signature  was  forged,  on  whom  does  the  loss  fall?  flia.  Page  44. 


If  a  bank  certifies  a  check,  say  for  (500,  and  it  subsequently  develops  that  the  check 
has  been  fraudulently  raised  from  I5  to  $500,  what  amount  will  the  bank  be  obliged  to 
pay?   315.    Page  44. 

If  a  bank  paid  a  check  to  a  bona-fide  holder,  and  it  subsequently  discovered  that  the 
drawer's  account  is  not  good  for  the  amount,  can  the  bank  recover  the  amount  from  the 
person  to  whom  the  check  was  paid?   212.   Page  44. 

If  a  bank  gave  a  depositor  credit  for  a  check,  and  during  that  day  it  discovered  that 
the  check  was  not  good,  can  it  rescind  the  credit?   2:3.  Page  44. 

Is  a  bank  in  paying  ot  certifying  a  check  supposed  to  know  that  the  indorsers*  signa- 
tures are  genuine?  215.  Page  44. 

If,  after  a  bank  had  paid  a  check  to  a  bona-fide  holder,  it  should  develop  that  the 
Indorser's  signature  was  forged,  on  whom  would  the  loss  fall  ?  315,  216.  Pages 
44>  45' 

Can  a  bank  certify  a  check  dated  ahead?  217.   Page  45. 

Can  an  o£5cer  of  a  bank  certify  his  own  check?  ai8.    Page  45. 

What  officers  of  a  bank  may  certify  a  check?  3ig,    Page  45. 

What  Is  a  bin  of  exchange?  320.    Page  46. 

What  la  an  Inland  bill  of  exchange?  221.   Page  46. 

What  la  •  foreign  bill  of  exchange?  322.  Page  46. 


i3  a  bill  cf  exchange  usually  drawn  against  any  particular  account  or  on  account  of 
any  particular  property?  223.    Page  46. 

Is  a  bill  of  exchange  valid  in  the  hands  of  one  who  knew  that  it  was  drawn  and 
accepted  simply  as  an  accommodation  to  the  drawer?   224.    Page  46. 

What  is  the  order  of  liability  of  the  parties  to  a  bill  of  exchange  that  is  not  yet 
accepted?   225.    Page  46. 

Does  this  order  of  liability  change  after  acceptance?   226.    Page  46. 

Does  the  holder  of  the  bill  have  to  recognize  this  order  of  liability  in  proceeding 
against  any  of  the  parties  or  all  of  them?   29.7.    Page  46. 

Docs  the  drawer  of  a  bill  of  exchange  make  any  specific  warranty  in  the  mere  act 
of  drawing  the  bill?   228.    Page  47. 

What  does  the  indorser  of  a  bill  of  exchange  warrant?   229.   Page  47. 

If  after  the  acceptance  of  a  bill  of  exchange  by  the  drawee,  he  should  ascertain  that 
the  drawer's  signature  was  forged,  would  the  drawee  be  obliged  to  pay  the  bill,  and  if  he 
did  pay  it,  on  whom  would  the  loss  eventually  fall?  230.  Page  47. 

If  the  holder  of  a  bill  of  exchange  or  of  a  check  should  present  it  for  payment  to 
the  party  on  whom  it  is  drawn,  and  the  holder  should  receive  money  thereon  (but  without 
indorsing  the  instrument),  and  it  should  subsequently  develop  that  the  indorser*s  signa- 
ture was  forged,  on  whom  would  the  loss  fall?   331  (same  rule  as  212).     Page  47. 


State  the  first  duty  of  the  holder  of  a  bill  of  exchange?   232.     Page  47, 

If  a  note  is  presented  to  the  bank  at  which  it  is  payable  and  it  is  not  paid,  but  is 

protested  for  non-payment,  would  the  drawer  be  released  if  he  was  not  duly  notified? 

233.   Page  47. 

Does  the  same  rule  hold  aa  to  the  drawers  or  makers  of  a  bill  of  exchange  or  a  draft? 

233,  Page  47. 

What  is  the  duty  of  a  holder  of  a  bill  of  exchange  in  preaenting  it  for  acceptance? 

234.  Page  47. 

Must  the  acceptance  be  written  on  the  face  of  the  bill?  236.   Page  47. 
Must  the  holder  accept  the  acceptance  if  it  is  signed  by  an  agent  of  the  drawee?  337. 
Page  48. 

Is  it  any  evidence  of  irregularity  of  a  bill  of  exchange  if  it  is  accepted  before  it 
leaves  the  drawer's  hands?  238.  Page  48. 

How  long  has  a  drawee  to  decide  whether  he  will  accept  the  bill  or  not?  239.  Pagu  48. 

If  a  drawee  has  detained  the  bill  to  decide  whether  he  will  accept  it  or  not,  when 
must  he  date  his  acceptance?   340.    Page  48. 

Does  the  term  "draft"  have  any  specific  definition  as  applied  to  commercial  paper? 
241-242.   Page  49. 

What  is  the  definition  of  a  promissory  note?  346.  Page  50. 


QUESTIONS. 


Page  ] 


The  letter,  refer  to  illuitrations  A  to;,U,ipases  57  to  9S 

What  are  the  usual  written  words  that  go  to  the  making  up  of  a  checlt?  A. 

As  so  written  who  is  the  payne;  drawee;  drawer?  A. 

What  does  the  drawer  specifically  warrant  in  drawing  the  check?  A. 

What  has  the  drawee  contracted  to  do?  A.  (Has  the  drawee  of  a  bill  of  exchanoe 
made  the  same  contract?  C.)  *' 

Has  the  payee  in  indorsing  the  check  and  receiving  the  money  on  it  made  any  contract 
with  the  bank?  What?  A. 

If  a  check  is  payable  to  W.  E.  Bonham,  state  an  "  indorsement  in  blank  "  by  such 
person.  A. 

What  ate  the  usual  written  words  that  go  to  the  making  up  of  a  promissory  note? 


Page 


Who  is  the  payeee?   The  maker  or  drawer?  B. 

Was  it  absolutely  necessary  to  the  vaUdity  of  this  note  that  it  have  a  date?  Page 
b. 

Would  the  signature  of  the  drawer  be  yalid  if  written  with  a  pencil?  Page  ii,  a. 
If  no  time  of  payment  was  specifically  stated,  when  would  it  have  been  payable? 


specific  ptace  ot  payment  had  been  stated,  where  would  it  have  been  payable? 

What  are  the  usual  written  words  that  go  to  the  making  up  of  a  bill  of  exchange'  C 
What  IS  the  first  duty  of  the  holder  of  a  bill  payable  a  given  time  after  sight?  Page 

The  bill,  Form  C,  is  drawn  on  a  person  at  Belfast,  Ohio.  If  the  bill  was  owned  by 
or  was  sent  for  acceptance  to  the  First  National  Bank  of  Cleveland,  could  the  bank  prop- 
erly allow  the  drawee  to  accept  it  payable  at  such  bank?  Page  24, 

If  the  drawee  of  the  above  bill  had  simply  written  "  James  McBride  "  across  its  face 
with  no  further  words  before  or  after  his  name,  would  he  have  assumed  any  Uability? 
Page  13.  Where  would  a  bill  so  accepted,  or  where  in  Belfast  is  the  blU  C  payable'  (See 
D.)    Pages  10,  II. 

If  "  Ihos.  Snell "  was  required  to  take  up  this  bill  by  reason  of  its  non-payment, 
what  proportion  would  he  be  entitled  to  collect  of  "Jno.  E.  Hale"?  Or  of  Wm.  H.  Car- 
penter? 

(Other  queries  are  suggested  by  the  matter  on  back  of  C.) 
What  instruments  does  the  term  "  draft  "  usually  apply  to?  D. 


QUESTIONS. 


If  an  instnraieiit,  payable  on  demand,  in  the  form  of  a  draft  or  of  a  bill  of  exchange 
is  drawn  on  a  bank,  what  is  it  properly  called?  D. 

If  an  Instrument  was  payable  to  the  order  of  J.  W.  Robinson  and  he  wished  to  nego- 
tiate it  to  Horace  Bemis  by  an  "  indorsement  in  full,"  what  would  be  the  writing?  E. 

Who  would  be  the  indorsee  in  such  an  indorsement?  E. 

If  such  an  indorsee  presented  the  check  for  payment,  what  would  be  a  proper  form  of 
indorsement?  E. 

What  warranty  would  such  last  indorsement  carry  with  it?  E. 

State  the  rule  as  to  when  the  holder  of  a  check  must  present  it  for  payment  if  ha 
wishes  to  retain  the  liability  of  all  the  parties  thereto.  F. 

What  liability  does  a  bank  assume  in  certifying  a  check?   G.  Pages  44,  45. 

Are  any  of  the  parties  to  a  check  released  if  the  holder  has  it  certified?'  G. 

Is  the  rule  different  if  the  maker  procures  it  to  be  certified  before  parting  with  it?  G. 

If  the  certified  check  has  been  raised  before  or  after  certification,  on  whom  does  the 
loss  fall?  G. 

If  the  maker's  signature  has  been  forged,  on  whom  does  the  loss  fall?  G. 

If  the  indorser's  signature  is  forged,  on  whom  does  the  loss  fall?  G. 

Draw  an  accepted  biU  of  eichange,  usual  form,  with  two  or  more  indorsers.  H. 


State  the  order  of  their  liability  among  themselves  of  the  several  parties.  H. 
Of  what  does  a  "  blank  indorsement "  bear  evidence?  J. 

When  an  instrument  payable  "  to  the  order  of  "  Wallace  Ford  has  been  indorsed  by 
his  writing  his  name  in  blank  (WaUace  Ford)  on  the  back  thereof,  and  it  has  thereafter 
come  into  the  hands  of  Seward  Goss,  how  can  Goss  again  make  it  an  instmment  payable 
"  to  order  "?  J. 

In  what  partnerships  has  each  member  of  the  firm  implied  authority  to  bind  the 
firm  by  signing  or  indorsing  commercial  paper?  J. 

Where  tne  partnership  is  such  that  no  member  has  such  implied  authority,  is  any 
one  bound  by  such  firm  signature?  J.  Nos.  r,  34,  76,  25. 

State  the  lirbiUty  among  themselves  of  the  several  indorsers  to  a  negotiable  instm- 
ment. K. 

State  the  liability  of  the  second  of  three  indorsers  to  the  holder  of  the  instmment 

E. 

State  the  liability  of  such  second  indorser  to  the  first  indorser.  K. 

If  an  instrument  is  payable  to  Nathaniel  Tolliver  "  or  bearer,"  and  TolUver  should 
indorse  it  "  Pay  to  the  order  of  Simon  Jarvis,  Nathaniel  Tolliver,"  is  the  instmment  then 
payable  "  to  bearer  "?  L. 


QUESTIONS. 


Write  01  state  a  restrictive  indoEsement.  L. 

What  is  the  effect  of  a  "  restrictive  indorsement "  on  the  negotiability  of  an  instru- 
ment?  M.  L. 

If  Wm-.  R.  Carpenter  was  to  lend  Hale  Davis  $700,  on  a  note  signed  by  Davis  and 
indorsed  by  Nat.  C.  Chadwick,  how  should  the  face  of  the  note  be  drawn?  N. 

If  there  are  three  payees  named  in  a  note  and  they  indorse  the  note  in  the  order  in 
which  they  are  named,  what  is  the  liability  of  the  second  indorser  to  the  first  indotser? 
N. 

If  Willis  Watkins  were  treasurer  of  the  Kennedyville  Plank  Road  Company,  what 
form  of  signature  should  he  use  in  a&sing  the  corporate  signature  to  commercial  paper? 
P. 

What  officer  of  a  corporation  has  implied  authority  to  sign  its  commercial  paper?  P. 

If  Edward  Dorsey  were  agent  for  James  Nelson,  what  would  be  the  proper  form  of 
signature  for  Dorsey  to  use  to  bind  Nelson  as  maker  of  commercial  paper?  Q. 

Is  the  fact  that  one  is  "agent "  for  another  evidence  that  the  agent  can  make  or  in- 
dorse paper  in  the  name  of  the  principal?  Q. 

Has  an  agent  with  authority  to  collect  accounts  implied  authority  to  indorse  checks 
drawn  to  the  order  of  his  principal  and  given  in  payment  of  one  of  such  accounts  so  col- 
lected by  the  agent?  Q. 


What  is  the  usual  intent  of  one  who  indorses  "  without  recourse  "?  R.  * 
Does  such  indorsement  relieve  the  indorser  from  all  financial  liabiUty  by  reason  of 
the  instrument?  R. 

Can  you  write  a  form  of  "  indorsement  without  recourse  "  that  would  relieve  the  in- 
dorser from  all  liability?  R. 

Write  a  form  of  "  waiver  of  protest."  S. 

If  a  note  were  drawn  payable  to  Wm.  R.  Carpenter  without  the  use  of  the  words  "  or 
order,"  or  bearer,  or  similar  terms,  would  it  be  negotiable?  T. 

State  the  form  of  promise  and  of  signature  that  would  constitute  a  "  joint  note  ";  a 
"  several  note  ";  a  "  joint  and  several  note."  M. 

What  is  the  liability  to  the  holder  of  each  of  the  signers  of  a  note?  What  amount 
may  he  collect  of  each?  M. 

What  is  their  liability  among  themselves?  M. 

Write  an  "indorsement  in  full";  "indorsement  in  blank";  a  "qualified  indorse- 
ment ";  a  "  conditional  indorsement a  "  restrictive  indorsement."  M. 

Which  of  these  indorsements,  if  any,  would  destroy  the  further  negotiation  of  the 
instrument  as  commercial  paper?  M.  ,  ^ 


QUESTIONS 


Tbe  numbers  refer  to  SliutratioiiSf  No.  i  to  No.  134^  from  pages  103  to  508, 


Do  the  words  "  in  New  York  Exchange "  express  "  certainty  as  requirefl  by  the 
statute?   If  not,  why?   No.  3. 

Is  "  subject  to  terms  of  contract,"  when  used  in  a  promissory  note,  a  condition? 
How  about  "given  for  machinery  as  per  contract"?  No.  4. 

Does  a  qualified  acceptance  change  the  character  of  a  bill  of  exchange?  If  80|  in 
what  way?  No,  5. 

State  some  forms  of  acceptance  that  are  qualified.  Nos.  5,  6,  7,  8. 

What  is  the  effect  of  a  material  alteration?  Of  commercial  paper?  No.  5.  Sec. 
125  et  seq. 

Is  a  draft  drawn  on  a  special  account  a  negotiable  instrument?   Nos.  8,  7,  6. 

iState  instances  of  "  special  funds "  which,  if  specifically  drawn  against,  would  take 
the  instrument  out  of  the  rule  of  commercial  paper.   No.  8. 

What  event  determines  future  time?  Does  death?  How  about  the  words  "  I 
promise  to  pay  to  her  estate"?   No.  9. 

State  a  contingency  that  will  render  a  note  non-negotiable?  No.  10. 

From  when  does  a  note  without  date,  take  its  date?  No.  11. 


Why  is  an  indoraeT  of  past  due  paper,  with  notice  of  a  counterclaim,  not  liable? 
No.  12. 

If  a  note  has  this  form  "  and  interest  at  per  cent>"  has  holder  authority  to  fill 

it  in?  Suppose  there  was  no  such  blank?  No.  13. 

Under  what  circumatances  may  a  conditional  delivery  be  shown?  No.  14. 
Who  will  be  held  when  a  draft  is  drawn  to  an  assumed  payee?  No.  15. 
Oral  giiaranty  of  a  note.   No.  zG. 

Where  en  act  is  required  to  be  done  by  a  board  of  directors,  la  the  act  valid  If 
each  director  gives  his  written  assent  outside  of  a  board  meeting?  No.  17. 

Has  the  treasurer  of  a  corporation  who  signs  implied  authority  to  indorse  and 
sell  notes  taken  in  the  course  of  its  business.  No.  18. 

Where  an  ofBcer  has  authority  to  indorse  notes  in  the  name  of  a  company,  will 
that  authority  extend  to  paper  indorsed  for  tbe  accommodation  of  others  if  the 
indorsing  corporation  re^ceives  a  bonus  for  the  indorsement?  No.  ig. 

Give  instances  of  authority  required  to  sign  corporate  papers.  Nos,  17,  18,  19. 

How  must  a  corporation  execute  its  paper?  No.  ao. 


QUESTIONS. 


What  is  the  effect  of  erroneous  forma  of  signatures  to  corporation  paper?  Give 
correct  form.   Nos.  21,  22,  23,  24,  25. 

Of  Executors,  Administrators,  Trustees,  and  Guardians.   Nos.  26,  27,  28  and  29. 

K  a  note  was  given  for  a  debt  of  the  estate,  or  the  funeral  expenses  of  the  deceased, 
and  was  correctly  signed  in  the  name  of  the  estate  by  the  executor,  would  it  bind 
the  estate  of  the  executor?   No.  27. 

If  a  note  was  signed  "A.  L.  Smith,  Executor  of  Estate  of  T.  J.  Reynolds,"  who 
would  be  bound  by  it?   No.  26. 

Does  a  guardian  or  trustee  who  in  good  faith  deposits  the  money  of  his  ward  in 
a  bank  account  in  the  trustee's  name  individually  incur  any  responsibility  if  the  bank 
fails?   No.  29. 

Is  middle  initial  part  of  a  man's  name?   No.  30. 

Where  there  are  two  persons  of  the  same  name  and  one  of  them  presents  a  check 
to  a  bank  drawn  to  the  order  of  the  common  name,  and  the  bank  in  good  faith  pays 
the  money  to  the  one  presenting  it,  is  it  protected  if  the  check  belonged  to  the  other 
person  with  the  same  name?   No,  30. 

Can  one  partner  in  a  manufacturing  business  bind  his  other  partners  by  signing 
or  indorsing  commercial  paper?   No.  32. 


Instance  where  indorsing  and  receiving  mx)ney  on  a  check  did  not  follow  the  rule 
that  such  indorser  warranted  all  previous  indorsements.   No.  31. 

Does  the  general  open  authority  to  carry  on  a  store  authorize  the  making  of  notes 
in  the  name  of  the  principal?   No.  33. 

If  the  treasurer  of  a  corporation  draws  its  check  to  his  individual  creditor  in  pay- 
ment of  his  debt,  and  the  creditor  takes  the  check  and  draws  the  money,  is  the  creditor 
under  any  risk  thereby?   No.  34. 

If  one  offers  to  sign  as  agent,  or  through  power  of  attorney,  for  another,  what 
protection  can  the  holder  reasonably  require?  Wo.  36. 

Can  the  directors  of  a  corporation  authorize  an  accommodation  indorsement?  What 
is  the  effect  if  all  the  stockholders  authorized?   No.  42. 

Does  a  power  to  indorse  notes  carry  with  it  power  for  the  agent  to  indorse  his 
own  individual  notes?    No.  43. 

Where  a  note  is  transferred  without  what  is,  in  law,  equivalent  to  a  commercial 
indorsement,  what  effect  does  it  have?  No.  46. 

Is  a  guaranty,  in  itself,  when  written  on  the  back  of  a  negotiable  instrument, 
always  equivalent  to  an  indorsement?   No.  46. 

Is  an  assignment  or  an  indorsement  on  a  detached  paper  equivalent  to  an  indorse- 
ment?  No.  46. 


What  is  meant  by  an  indoisement  in  blank?  No.  48. 

What  is  meant  by  the  language  of  clause  3,  sec.  35?   Give  an  illu  tration.  No.  49. 

Does  the  usual  indorsement  "  without  recourse "  relieve  the  indorsers  from  any 
liability  in  connection  with  the  paper?   No.  50. 

Must  a  note  made  to  the  order  of  "the  directors"  of  a  corporation  be  indorsed 
by  all  the;  directors?   What  is  a  sufficient  indorsement  of  such  a  note?   No.  53. 

What  is  the  effect  of  an  indorsement  to  the  cashier  of  a  bank  when  his  ofBcial 
position  is  not  designated?  No.  53. 

State  instances  where  the  signatures  of  the  individual  members  of  the  firm  are  not 
equivalent  to  the  writing  of  the  firm  name.   No.  55. 

Give  a  definition  of  what  is  meant  by  "  good  faith "  in  a  transaction  wherein  a 
note  is  purchased.    No.  56. 

If  a  bank  could  safely  give  an  agent  money  for  his  draft  on  his  principal,  could 
it  as  safely  give  him  credit  for  it, —  and  then  pay  the  money  on  his  individual  check? 
No.  58. 

If  a  bank  buys  a  negotiable  instrument  and  gives  the  seller  credit  for  it,  is  it, 
thereby,  a  bona-fide  holder  to  the  same  extent  as  if  it  paid  money  for  it.   No,  59. 
What  constitutes  notice  of  defective  title?  No.  So. 


Would  payment  to  a  creditor,  of  a  partner  in  payment  of  his  individual  debt,  in 
cash  taken  from  firm's  cashbox,  constitute  "defect"?  Nos.  61,  62,  70. 

Can  the  president  and  secretary  of  a  corporation  give  valid  pledge  of  property 
of  the  corporation  to  secure  the  president's  debt?   Wo.  63. 

If  a  note  is  payable  to  one  as  trustee,  and  he  properly  indorses  it,  is  a  bona-fide 
purchaser  protected  in  taking  it?  How  would  this  be  as  to  stocks?  State  the  general 
reasons  for  your  answer.   No.  64,  65. 

In  all  States  does  a  guaranty  written  on  a  note  inure  to  the  benefit  of  subsequent 
purchasers?   No.  72. 

Where  there  is  an  agreement  to  accept  drafts  generally,  what  is  acceptor's  liability? 
No.  73. 

No.  76  is  a  ruling,  seemingly  not  in  accord  with  the  statute. 

What  is  the  liability  of  indorsers,  under  the  statute,  of  a  note  usurious  at  its 
inception?   Of  the  maker?   No.  79. 

Where  no  place  of  payment  is  named  on  a  note,  and  note  was  not  actually  pre- 
sented to  the  maker,  at  his  residence  or  elsewhere,  is  indorser  discharged?  No.  81. 
See,  also,  No.  82. 

What  is  the  duty  of  the  owner  of  a  check  as  to  its  presentation?   No.  85. 


What  procedure  may  be  adopted  where  there  has  been  a  payment  of  a  draft  by 
worthless  check.  No.  86. 

Give  an  instance  of  insufficient  notice  of  dishonor.   No.  88. 

Under  what  circumstance  does  an  indorser  waive  demand  and  notice?  Give 
another  instance.    No.  8g, 

As  to  demand  and  notice,  what  conditions  affect  the  liability  of  an  indorser? 
No.  go. 

Protest  cases.   No.  gi,  92,  and  izg. 

Circumstances  under  which  notice  to  indorsers  was  unnecessary.  No.  gs- 

Does  a  check  drawn  "  in  full  of  account,"  and  cashed  by  the  payee,  operate  as 

payment  of  the  whole  account  if  there  is  more,  in  fact,  due  on  the  account?  Are 

there  exceptions?   What  are  they?   No.  gs. 

What  is  the  effect  of  the  purchase  by  a  firm  of  a  note  of  one  of  the  partners? 

No.  g6. 

What  effect  does  an  extension  of  time  of  payment  of  commercial  paper  have  on  the 
indorsers  and  sureties?   Nos.  97,  g8,  gg  and  100. 

What  is  the  effect  of  a  material  alteration?  No.  loi.  Immaterial?  No.  102. 
Of  commercial  paper?   No.  103. 


Inserting  name  of  additional  payee?  No.  104.  Of  the  date?  No.  105.  Of  erasure? 
No.  106. 

Is  a  telegraphed  answer  that  maker  of  a  check  is  "  good  for  the  amount "  an 
acceptance  under  the  statute?   No.  108. 
A  qualified  acceptance.   No.  109. 

State  some  forms  of  acceptance  that  are  qualified.   Nos.  no,  in,  and  112. 
When  is  a  note  dishonored  by  non-acceptance?   No.  113. 

Liability  of  banks  in  handling  bills  of  lading  attached  to  drafts.  Nos.  114, 
IIS,  ri6- 

Note  executed  on  Sunday.   No.  117. 

If  the  maker  of  a  note  subsequently  gives  security  to  one  of  his  several  sureties, 
who  has  the  benefit  of  the  security?   No,  118. 

Is  one  protected  who  in  good  faith,  and  with  no  notice  or  knowledge  of  his 
insanity,  takes  the  check  of  an  insane  person?    No.  119. 

Is  an  assignment  or  an  indorsement  on  a  detached  paper  equivalent  to  an  indorse- 
ment?  No.  120. 

If  a  note  is  not  properly  indorsed  when  sold,  but  is  subsequently  properly  indorsed, 
of  what  dates  does  the  instrument  take  effect?   No.  120. 


If  a  note  is  made  payable  in, —  say,  Ohio,  and  is  indorsed  in  Indiana,  by  the  laws 
01  which  State  are  the  parties  governed?   No.  124. 

If  a  note  provides  for  the  payment  of  attorney's  fee,  is  it  negotiable  on  all  States? 
Wo.  125.   See  No.  54. 

Is  a  note  formally  issued  under  a  seal  a  negotiable  instrument?   No.  129. 

Is  an  instrument  for  "  one  hundred  dollars,  in  current  funds,"  a  negotiable 
instrument?   No.  132. 


Does  the  liability  of  an  indorser  attach  usually  to  one  who  writes  his  name  on 
the  back  of  the  last-mentioned  instrument?    No.  132. 

What  is  the  difference  between  a  general  guaranty  and  a  special  guaranty?  Wh& 
may  take  advantage  of  them?    No.  133. 

If  a  draft  perfect  in  form  is  stolen  from  the  drawer  by  the  payee  and  is  transferred 
to  a  bona-fide  holder,  can  such  holder  enforce  it?   No.  134. 

Wlien  a  note  is  executed  in  one  State  and  indorsed  in  another,  indorser's  liability 
IS  governed  by  the  laws  of  what  State?   No.  54.   See  No.  134. 


INDEX 


When  reference  is  to  a  page,  the  word  "  page,"  in  parentheses,  accompanies 
Negotiable  InBtruments  Law,  given  in  thia  book. 

SECTION 

ACCEPTANCE 

By  Separate  Instrument    134 

Definition   191 

General,  What  Constitutea    140 


Holder  Entitled  to,  on  Face  of  Bill   133 

How  Made    132 

Kinds   139 

Liability  of  Drawee  Retaining  or  Destroying  Bill   137 

Of  Incomplete  Bill    138 

Promise,  When  Equivalent  to   135 

Qualified.    Rights  of  Parties   HI 

Time  Allowed  Drawer    136 

Trade  Acceptance   (Page)  449 

Verbal,  When  Binding   (Page)  44 


the  figure.    In  all  other  cases  the  reference  numbers  are  to  the  sectioii  numbers  of  the 


8E0TION 

ACCEPTANCE  FOR  HONOR 

Agreement  of  Acceptor    185 

Dishonor  of  Bill  by  Acceptor  for  Honor   170 

How  Made    162 

Liability   164 

Maturity  of  Bill  Payable  at  Sight   166 

Presentment  to  Acceptor,  How  Made   168 

Protest.    Or  Containing  a  Reference  in  Cose  of  Need   187 

When  Bill  May  Be   161 

When  Deemed  for  Drawer   163 

When  Delay  in  Presenting  is  E:5cused   169 

ACCEPTED  CERTIFIED  CHECK 

IndoreerB  Released                                                                     (Page)  29 


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ACCEPTOR  SECTION 

The  Principnl  Obligor   (Page)  23 

ACCEPTOR  OF  CHECK 

Acceptance  anJ  Certification   {Page}  24 

ACCOMMODATION  PAPER 

Delinecl   (Page)  40 

ACaiilMODATION  PARTY 

Liability  of   29 

ACTION 

Includes  Counter -Claim  and  Set-Off   191 

AGENT 

Liahility  of   69 

Signature,  Authority,  How  Shown   19 

ALTERATIOiN 

JIaterial  (Page)  18 

ASSIGNiCBNT 

Effect  of  When  Written  on  Separate  Paper  (Page)  26 

AT  SIGHT 

Defined  (Page)  13 

BANK 

Definition   191 


BEARER  SECTION 

Defined    191 

Payable  to,  When    » 

BILL 

Meaning  of   191 

BILLS  IN  SETS 

Acceptance  of  Bills  Drawn  in  Sets   181 

Constitute  One  Bill    178 

Effect  of  Discharging  One  of  a  Set   183 

Liability  of  a  Holder  Who  Indorses  Two  or  More  Parts  of  a  Set  to  Different 

Persona   180 

Payment  By  Acceptor  of  Bills  Drawn  in  Sets   182 

Rights  of  Holder  Where  Different  Parts  are  Negotiated   179 

BILL  OF  EXCHANGE 

Addressed  to  More  Than  One  Drawer   128 

Inlnnd  and  Foreign    129 

Definition    12& 

Not  an  Assignment  of  Funda   127 

Referee  in  Case  of  Need   131 

When  Treated  as  a  Promissory  Note   130 


BLAKKS  SECTION 

When  They'  May  be  Filled   14 

CERTAINTY  AS  TO  SUM 

What  Constitutes   2 

CHECKS 

Certified  Liability  of  Parties  {Page)  43 

Not  An  Assignment   (Page)  42 

Poat-Dated   (Page)  42 

OOMMBRCTAL  PAPER 

As  Used  Herein   (Page)  9 

Definition  (Page)  3 

CONSIDERATION 

Effect  of  Want  of    2S 

Presumption  of    24 

CONSTRUCTION 

AVhere  Instrument  is  Ambiguous    17 

CONTRIBUTION 

Eiiforcible  When  and  How  (Page)  3-8 

DATE 

Ante  and  Post-Dated    12 

Presumption  of    11 


wmsm 


SECTION 

When  ilay  be  Inserted    13 

DEFINITIONS   191 

DELIVERY 

Defined    jgj 

Stolen  Piiper  (Page)  34 

When  Effectual,  When  Presumed   

Warranty    65 

DEiMAND 

When  Payable  on    7 

DISCHARGE 

Alteration,  Effect  of   124 

Cancellation,  Unintentional:  Burden  of  Proof   123 

How   119 

Renunciation  By  Holder    122 

Right  of  Party    121 

What  Constitutes  a  Material  Alteration   125 

DISCHARGED 

When  Persons  Secondarily  Are    120 

DRAFT 

Explained  (Page)  48 


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DRAWER  OF  BILL  OR  OF  A  DRAFT  section 

Status  of   (Page)  21 

DRAWEE  OF  A  BILL  OR  DRAPT 

Before  and  After  Acceptance   (Page)  22 

FOEiM 

Of  Commercial  Paper   (Page)  10 

GUARANTOR 

Ib  an  Intruder   (Page)  30 

HOLDER 

Defined   191 

His  Ubligations  (Page)  31 

HOLDER  m  DUE  COURSE 

'Notice  of  Defect    gg 

Notice  Before  Full  Amount  Paid    54 

Right  to  Sue,  Payment    51 

Rights  of    gy 

Wliat  Constitutes    52 

When  Not  Deemed    53 

When  Subject  to  Original  Defenses   gg 

Who  iB  Deemed  a  Holder   59 


HOLDER  FOR  VALUE  SEOTiow 

What  Constitutes   25 

When  Lienor    27 

HOLIDAY 

When  Last  Day  Falls  On    194 

INiOOMPLETE  INSTRUMENT 

Not  Delivered    ig 

INDORSEMENT 

By  Infant  or  Corporation    22 

Blank,  How  Changed  to  Special    35 

Conditional   39 

Defined   191 

Effect  of  Transfer  Without   49 

How  Made  _  31 

In  Representative  Capacity    44 

Kinds  of   33 

iMisspeiled  Name  or  Wrong  Designation   43 

Must  Be  of  the  Entire  Instrument   31 

Payable  to  Bearer,  How  Negotiated   40 

Place,  Presumption    43 

Qualified    38 


SECTION 

Restrictive,  Rights  of  Indorsee    37 

Special.    In  Blanlc   

Striking  Out   <8 

Time,  Presumption  

To  Person  as  Casliier,  Effect  of   '12 

When  Restrictive    36 

Wliere  Payable  to  Two  or  More   41 

INDORSER 

Effect  of  Paper  Not  Properly  Protested  (Page)  2(i 

Liability  of  General  Indorscr   

Liability  of  an  Irregular   84 

Liability  mere  Paper  Negotiable  By  Delivery   67 

When  Person  is  So  Deemed   ^'^ 

mDORSER'S  CONTRACT 

Stipulations   (Pa.ge)  24 

INSTRUMENT 

(Drawn  to  Person  as  Cashier  

Meaning  of  

ISSUE 

Defined  


LLiBILITlES  OF  PARTIES  seotiok 

Of  Acceptor    62 

Of  Drawer   61 

Of  Maker   60 

LlAiBILITY 

Order  of  (Page)  26 

LAW 

Common  and  Statute   (Page)  52 

LAW  MERCHANT 

When  Governs    lOS 

MISSPELLED  NAME 

How  Rectified,  Te«t   (Page)  27 

KEGOTUBILITY 

Continimtion  of  Negotiable  Character    48 

Provisions  Not  Affecting    5 

NEGOTIABLE  INSTRUMBNTS 

Form  of    I 

NEGOTIATION 

Defined   (Page)  34 

What  Constitutes    30 


NOTICE  OF  DISHONOR  beotion 

By  Whom  Given   90 

Delaj,  How  Excused    113 

Deposit  in  Post  Ofliee    106 

Form    98 

Given  By  Agent    91 

Given  on  Behalf  of  Holder,  Effect  of   92 

Nou-Payment  WHiere  Acceptance  Refused    116 

Of  Non -Acceptances,  Omission  To  Give   117 

Sufficiency   95 

Time  Within  Which  iMust  Be  Given   102 

To  Antefedent  Party,  Time  of   107 

To  Bankrupt    101 

To  Partners    99 

To  Persons  Jointly  Liable    100 

To  Whom  Given    89 

To  Whom  May  Be  Given   97 

Waiver  of    109 

Waiver  of  Protest   Ill 

When  Agent  May  Give    94 

When  Dispensed  With    112 


SBOTION 


WTien  Need  Not  Be  Given  to  Drawer   114 

When  Need  Not  Be  Given  to  Indorser   115 

When  Protest  Must  Be  Made,  When  Need  Not   118 

When  Sender  Deemed  to  Have  Given  Due  Notice   105 

Where  Given  By  Party  Entitled  Thereto,  Effect  of   93 

Where  Must  Be  Sent    108 

^Vhere  Parties  Reside  in  Different  Places   104 

Where  Parties  Reside  in  S'ame  Place   103 

Where  Party  is  Dead    98 

Whom  Affected  By  Waiver   lio 

OMISSIONS    6 

ORDER 

Payable  to,  ^en   8 

PAYMENT  FOR  HONOR 

Declaration  Before    173 

Effect  on  Subsequent  Parties  Where  Bill  is  Paid   175 

How  Made   172 

Preference  of  Parties  Offering  to  Pay   174 

Rights  of  Payer    177 

Where  Holder  Refuses  to  Receive  Payment  Supra  Protest   176 


SECTION 

Who  May  Make    171 

Parties  to  Commercial  Paper  (Page)  20 

PERSON 

Includes    191 

PRESENTMENT  FOR  PAMEINT 

Dishonored,  Liability  Person  Secondarily  Liable   84 

Duty  of  Holder  Where  Bill  is  Not  Accepted   100 

Effect  of  Want  of  Demand  Upon  Principal  Debtor   70 

How  Made   145 

Instrument  Must  Be  Exhibited   74 

On  What  Day  May  Be  Made   146 

Place  of   73 

.   Eights  of,  Holder  Where  Bill  is  Not  Accepted   151 

Sufficiency    72 

Time,  How  Computed    86 

Time  of  Maturity    85 

To  Joint  Debtors    78 

To  Persons  Liable  as  Partners    77 

-  What  Constitutes  in  Due  Course   88 

Where  Delay  is  Excused    81 


SECTION 

When  Dishonored  By  Non-Acceptance   149 

When  Dishonored  by  Non-Payment   83 

When  Excused   148 

When  Failure  Releases  Drawer  and  Indorser   144 

When  May  Be  Dispensed  With   82 

When  Must  Be  Made   143 

When  Not  Required  to  Charge  Drawer   79 

When  Not  Required  to  Charge  Indorser   SO 

When  Principal  Debtor  is  Dead   76 

When  Time  is  Insufficient...   147 

Where  Instrument  is  Not  Payable  Upon  Demand   71 

Where  Instrument  Payable  at  Bank   75 

Rule  .  ,  .  .:  ,   87 

PRINCIPAL  OBLIGOR 

Defined  (Page)  3 

PROMISSORY  NOTES  AND  CHECKS 

Definitions   184 

Check  Defined    185 

Effect  of  Certification  of  Cheek,.,   187 

Effect  Where  Holder  of  a  Cheek  Procures  it  to  Be  Certified   188 


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SECTION 

When  Check  Operates  as  an  Assignment   189 

Within  What  Time  a  Check  Must  Be  Presented   186 

PEOTEST 

By  Whom  Made   154 

Explained  (Page)  50 

How  Made    153 

In  What  Cases  Necessary   152 

When  Dispensed  With   159 

When  Made    156 

Before  Maturity  Wliere  Acceptor  Insolvent   158 

When  May  Be  Again  Protested   157 

When  to  Be  Made   155 

Where  Bill  is  Lost   160 

REASONABLE  TIME 

What  Constitutes    193 

RELEASE  OF  PARTIES 

What  Discharges   (Page)  36 

SIGNING 

Effect  of  Forged  Signature   23 

Effect  of  Signature  by  Procuration   21 

Trade  or  Assumed  Name.    Liability  ,   18 


SECTION 

SUNDAY 

Time.   Kow  Computed    194 

SURETY 

Obligations  of   (Page)  30 

TIME 

Determinable  Future,  What  Constitutes   4 

How  Computed.   When  Last  Day  Falls  on  Holiday   194 

Inconsistent  Dates   (Page)  42 

On  Demand.    At  Sight   (Page)  38 

Reasonable.   What  Constitutes    193 

TERMS 

Sufficiency  of    10 

TRADE  ACCEPTANCE   (Page)  449 

TRANSFER 

Prior  Party  May  Reissue  and  Negotiate   60 

UNCONDITIONAL  PROMISE    3 

VALUE 

Defined   191 

WRITTEN 

Comprises    191 


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